All Forum Posts by: Shawn McCormick

@Alexis York. Your best bet would be to talk to a local lender where you plan to purchase and have them look over your income and how much you are actually claiming. I spent many years in the restaurant business and I always tried to teach my employees to claim more tips for reasons you are experiencing, but the temptation of quick cash was generally too much. 

It may take some time to get you on track to do conventional financing, but there are options out there like DSCR, bank statement and income only that may be options. They do come with higher rates typically, but fit the bill for what will get you off the sidelines and on to your second property. I have a few great lenders that would be happy to at least have a conversation with you to get things started.

As for the market, the best time to buy is always 5 years ago. So waiting for the market gods to align with better rates, more inventory, less competition and falling prices is never a good strategy. I'd be happy to go over whats happening in the Central Florida market (Orlando and surrounding areas) if that is something you are considering. 

Best of luck to you!

I agree with Ryan. When covid first started, many of the owners of STR here either put a long term tenant in there just to cover their nut or sold them (and are now kicking themselves!!...double the value now). Yes, most all of these communities do allow for LTR, but the infrastructure is not conducive to it. Most have a CDD to help offset the fact that there aren't full time residents contributing to the local economy so less grocery/retail stores, schools are further away and especially with the bigger homes...you will usually have a few kids, but no neighbors to play with or socialize.

I actually have one client that has a LTR in a 9 bedroom in Solara that is allowing his tenant to arbitage his home for Airbnb. He is getting $4200 month. Like @Ryan Moyer said, at that price, it just doesn't make sense. The flip side is that at least if you have a bigger home, you can always fill it up with guests. So if you have an 8 bedroom, you can list it as a 3, 4, 5, 6, 7 or 8 bedroom and keep it full, but at a lower ADR. If you have a small unit, its a race to the bottom with the thousands of others that are just trying to stay afloat.

@Arthur Chu There are a ton of threads in here about the same as you are asking, your questions and more will be answered. As Ryan said, we have quite a few STR only communities with amenities and locations that are made for tourism and are zoned specifically for rentals. If you go outside of those, you're going to risk losing the attractiveness of why people come here. They want to be close to the theme parks and have a well themed house. Since we don't have ocean/mountain views or unique locations, the community should have great amentities (like Championsgate, Solara, Solterra, and Storey Lake to name a few) and also have themed bedrooms and a converted garage.

To address your saturation issues, yes, we do have tens of thousands of STR homes, but we also get over 70 million visitors a year. Finding the niche size will also be important, smaller ones (2-4 beds) will be competing against hotels, time shares, condotels, and townhomes and sometimes it can be a race to the bottom with ADR. So keep a clean home with amazing photos that is close to Disney and is well themed and you won't get caught in that trap.

Best of luck!

@Serge DuLaudAllemans I will send you a message

@Endory Neves Looks like you are in Orlando. You are in the middle of one of the absolute best places to be. You could pick up units beachside, East or West and/or stay right near the theme parks. The Disney area has many STR communities that are purpose built for that reason and it is proven, not nearly as much data to collect or city/county rules to sift through. You will have to figure out what your budget allows and make sure that specific size/type/location of home performs well and isn't in a more saturated field.

Best of luck to you.

STR can be tricky in a area that is based on tourism. It is ever-evolving. Orange county (most of greater Orlando) does not allow it, there are very few exceptions. All other areas allow it, but you still have to keep up on local ordinances of individual cities/municipalities and of course every individual community HOA. You can do very well with just a 'regular' house in an average neighborhood. With the growth we are experiencing, not all STR are tourists..so lots of opportunities to capture IT, infrastructure, nurses etc that need longer term housing. Then of course we have the tourist corridor near Disney that has many exclusive resort communities that are literally built to be STR communities complete with impressive amenity centers. I have sold many homes like those and most do very well, but it is more competitive and you do have to stand out.

As far as crime goes, use sites like city-data or trulia. They give a pretty good picture of whats going on. Honestly you can go to google street view and get a good idea of if it looks like an area you would want to live in, own it and if families would find it appealing to rent short term.

@Jake Mackenzie you have a solid budget so you will be able to pretty much pick any area of orlando and find something suitable. If you plan to take work all over, I would suggest staying around the 408 as it gives you access to the turnpike, I-4 and other expressways easily so you can navigate the entire city pretty well. Looking at some areas that will continue to grow and offer appreciation play would be Clermont/Minneola, Apopka, Winter Garden, Lake Nona, Davenport, St. Cloud, Sanford/Deland and a few others.

All of those areas are within 30 minutes of DT, not all have entertainment districts, but nearby areas would. Let me know if this helps and if I can answer anything else for you.

@Jake Mackenzie those are pretty open ended questions. If you are going to live here, we need to know about you too. Where will you be working, are schoold important (kids?), do you travel alot (near airport), are you Disney 'freaks', do you like to bike/hike/outdoor, house/condo/townhome...are you trying to house hack? What is your social scene..foodie, clubs, fitness. These are just some of the questions I would have to give you some direction. And that's not even getting into budget. Our median price for SFR is over $400 until you get pretty far away from Orlando. We have tolls roads everywhere, so just getting around town can be expensive, so that should play into look if you do any commuting at all.

This is 'the city beautiful' so lots of good areas for living, but since I'm licensed, I can't get into suggesting where not to go--LOL. Feel free to reach out if you want some more specific insight because some areas are just more known for being family friendly or full of renters or known for higher crime. So this will depend on where you are in your life, what is the plan to stay in the home, will it eventually become a rental etc.

Best of luck!

 Hi @Zachery Hitchcox Central Florida did see a huge increase in agents since the market starting going up. This has been steadily increasing and although I don't have a specific number, the last I heard we have around 26,000 agents just in Central Florida. It is no surprise that your are running into new(er) agents, but there are plenty of us experienced ones too. Every agent will market themselves as 'investor friendly', but so many don't really know what that means. They just sold a second home to an out of state buyer once and its easy to spin that into 'experience'. 

Happy to have a conversation about the Orlando market with you if you need. Best of luck to you!

@John Rankin Lots of good thoughts and opinions so far. Since you left the specifics of location only to the Southeast, that means a specific target area will get different answers. Say you are looking at Beach towns in Florida...a two bedroom condo may suite you very well. If you are looking at Disney, than a bigger home with great amenities is the way to go. If Georgia in/near the mountains, than a smaller cabin or something secluded with a veiw is what you'll want. Bigger is only better if the destination warrants it. Orlando for example get lots of tourist groups that rent multiple homes at once or youth sports leagues coming for tournaments or foreign families that bring multi generations, so big homes do very well here, the smaller ones far outnumber the large ones and the ADR is very competitive. 

So I would narrow your search to what appeals to you (assuming that you'll want to use it personally too) and go from there. As far as the pathway to LTR/multi, you could always 1031 into those once you are 'done' with the STR or just diversify now and get into both segments.

Best of luck to you.