All Forum Posts by: Shawn McCormick

@Abby H. I can send a couple for you to contact. Send a message if you still need recommendations.

@Shiny Sasidharan welcome to the Sunshine State, quite a climate change for you. One of the best places, IMO, to meet like-minded people is joining CFRI, the local chapter of the National REAI and one of the biggest there is. Tons of meetings, education events, networking opportunities with contractors, wholesalers, title and everything else you will need to get up and running in Orlando. 

If you are looking to get licensed here, let me know.

Best of luck to you.

Hi @Michael Monello

Have you connected with any wholesalers locally or done any marketing yourself to find off market properties? The local chapter of the national REIA is Central Florida Realty Investors (CFRI) and most of the top local wholesalers are members and often are spotlighted in meetups and panels. I would suggest attending some of the meetings and/or joining if this is something you are truly committed to doing. They all have email lists that you can join..best way is to google "buy my house fast in Orlando" or similar and you will see many results for their websites and you can sign up quickly.

As for cash flow, those are mostly being found well outside of Orlando right now, but I suspect that will be changing soon, unfortunately in part due to Hurricane Ian and damages. Insurance companies are crushing Floridians right now even before the storm, it will force many people to either pay outrageous premiums, try and fix themselves or have to sell. This will create higher demand for wholesalers to buy distressed properties that won't qualify for financing and thus more opportunity for end buyers like you to provide (in many cases) those same people with a rental. 

I also feel with all of the displaced people from SW Florida and other coastal towns, will be coming inland and Orlando is a perfect place, so rental rates will likely continue to rise with even higher demand than usual.

Are you using any sort of spreadsheet or calculator to evaluate properties? There is a good one right here on BP. Since you aren't going to be working with an agent to help run comps and rental potential, be careful what many wholesalers will tell you comps will be, they are sales people trying to move a property quickly. But on the other hand, you may be over analyzing some of the costs, good to be cautious. 

Best of luck to you.

 Thanks @Michael Baum. @Dom Radcliffe. Good advice here so far. I would echo what others said about ramping up. The first year, I would not expect your occupancy rate too high and you may emplore what some do by offering lower nightly rates to get it booked and get some reviews under your belt, year two will be better and by year 3 you should be close to the 80% if you do things correctly. Depending on if you were able to take over existing bookings when you purchased or started from scratch and also what community you are in. 

@Audi Pine What type of property are you looking for, STR, LTR and what type of property. The most recent figures put out by the Florida Realtors Association are telling a story and hopefully your agent is in tune with whats happening here.

With rates rising yet again, (not just mortgage rates, but rates that will effect buyers DTI, like car loans etc), This is eating into what buyers can afford. 3 months ago they may have been able to afford $400,000, now with the rates jumping and their DTI dropping, they may have to shop in the $325-350 range or worse. That is putting pressure on lower priced homes, which investors are also seeking out.

A "good deal" literally means something different to each buyer/investor, so without knowing what that means to you and your goals and exit strategy, it would be hard to tell you where to look. However, I can tell you there are more properties on the market and, at least here in Orlando, we are seeing sellers becoming more motivated, so keep looking and make your agent dig a littler deeper for you!

Best of luck to you!

Hi @Steve Uekert and thank you @Michael Baum.

Steve, Orlando does have 10's of thousands of units here, mostly centered around the Disney area (Universal and Sea World aren't that far away, but those areas don't allow STR. So that means a very concentrated area to put these types of units into and then you separate them further by being in a resort community, a 'regular' neighborhood that allows STR. Without knowing what parameters you put in and what type of property etc, its very hard to say where this was.

If your unit is in a higher end resort community that actually is searchable on the booking platforms has a reputation, is close to the theme parks and offers great amenities, than you will be able to charge much higher rates. If you go a step further and offer something unique in your theming or your community has golf or something else, that will just add to enticement to book with you rather than the bargain hunters looking for $69/night. 

As a rule, there are multiple times more smaller units, think 1-3 bedroom condos, 3-4 bedroom townhomes, 3-4 bedroom single family, plus timeshares, condo-tels, hotels and there is sometimes a race to the bottom with owners trying to fill nights by lowering prices. 

And something to consider is that you are ultimately buying a small business and just because the current owner is managing it poorly and not charging enough, does not mean that you can't turn it around and do better. I've sold a lot of units here and the reasons for selling vary greatly. Many times the owners are foreign and just don't know what to do and how to properly manage, hire a bad property manager etc. I would suggest to look at other units in the same neighborhood to see if everyone is charging low rates, there may be something telling there....bad HOA, amenities not maintained, too far drive to the theme parks etc.

Hope this helps, best of luck to you!

 @Sara Klainer There are several large resort communities that you should also consider.  @Ryan Moyer is correct about the management and amenities at Encore. I have a list of similar communities that perform quite well and have similar amenities. What type of property are you looking for, condo, townhome or single family. Are you looking to offset the cost of your own vacations or is pure cash flow the most important aspect?

Happy to discuss this further if you like, just message me and we can connect. Thanks @Michael Baum.

Best of luck!

@Steve Uekert There are pros and cons to each of the type of homes. One of the first things you need to do is understand your budget. That will determine what type and size of home to look at. Another thing that should be high on your list is if you will be self managing or hiring a PM. Most of the homes here, whether single family or towns have pretty similar floor plans, so finding one that you can make stand out in any way is a plus. In Orlando (at least), the typical thinking is to buy as big as you can afford, there are fewer of the larger homes and you also have much more flexibility to decorate and theme them with more square feet and #bedrooms. You mentioned townhomes too, many don't have pools, they are the size of a splash pad or in ground hot tub, they have no garages and most actually will have rear neighbors (which really doesn't matter for the purpose of a STR in Orlando, they are here to visit the theme parks etc, not the view) and only two in each building will have one side neighbor.

As far as HOA's, condos will be the worst, but most of the resort communities allow you to self manage so you won't have to worry about 'front desk/reception'. Yes, most have onsite people to help with amenities etc, but they don't get involved in the bookings, cleanings, or specific homes, just there to help.

Hope this helps, if you need more info, just message me. 

Best of luck!

 @Steve Uekert, although I don't currently own any STR, I have represented many on the purchase and sale side locally. Yes, the inventory has grown since rates started going up. All of these units are owned by investors, so the cost of entry is typically cash or 20%, so everyone was holding their breathe waiting to see if something would bend. However, it has now been about 5 months of this and sellers are seeing 60+ days on market to get any activity.

As long as they are/have been pro active getting bookings and not fearful of what 'might' happen, they are still cash flowing, so most are sticking to their guns and hoping that buyers will eventually accept the evolving market we are in and pull the trigger.

Inflation has affected American travelers that would typically drive here, but overall, I'm hearing that bookings are still quite strong due in part to Foreign travelers still having high demand. September is historically one of our slowest months due to our school years in America going back in session, so trying to get a snapshot of whats happening right now is not necessarily the best idea, I usually advise to look at Quarters and average them out, rather than get too worried about a week here and there. I've seen many calendars (just log into airbnb and try to book some units to see) and most are doing very well going into the winter months.

Hope this helps, best of luck.

@Account Closed I live in Orlando, but from Ohio and invest in both areas. They are completely different markets and should be evaluated as such. Also, comparing a city to a State is much different, what part of Ohio are you looking into. 

Taxes, insurance, landlord/tenant laws, jobs market, weather and soooo many other factors to consider. Prices have risen sharply since covid in Florida which has made cash flow more difficult to find, Ohio I have a pick of most anything I want. So Florida will suit you well in some ways like appreciation, more population growth, no state income tax etc and Ohio will be a lower entry point, strong economy in most major metros and cash flow. 

Orlando is always a good STR play if you think that might fit your needs, cash flow will be superior to LTR here.

Best of luck!