All Forum Posts by: Shawn McCormick

@Melanie Martin del Campo Congrats on getting under contract, it's difficult right now on the larger homes. You asked about theming..I would take into consideration how well it is currently booked out and do you plan to keep those bookings. I would take a look at the nightly rate and see if there is opportunity to raise those based on availability in the market. As long as your calendar is full, I would focus on what you have and make sure the first couple of months worth of guests are getting a clean home and you maybe even incentivize them to leave a great review to get you going. If you are available and you have the contractors/theming company ready to go with redoing a room or two, I would say go for it. Try to do a room or two at a time and that will be less stress than shutting down for a couple of weeks and trying to rush everything.

Best of luck!

@Account Closed What attracts you to Orlando. Do you like going to the theme parks or the shopping/dining that is here due to all the tourism, or just a clean, friendly city? If you think you want to do short-term, you'll be best off being near the theme parks, If long term, you could be anywhere, but with long term, you won't be able to use it....

If you plan to use it yourself and like to play golf or enjoy resort amenities, than Reunion or Championsgate may be a good fit. If your a Parrothead, than maybe Margaritaville.

We have plenty of lenders here that can do Foreign National loans as we have a ton of International buyers here. Harding-Bell is a great place to start. Good Luck!

@Melanie Martin del Campo your agent/PM should be able to answer all of those questions. Are they not assisting you, seems like that is their niche. 

There isn't a direct answer to your question. It partly depends on when you buy and close. If you are looking to buy now and close in about 30 days..you will be wanting to just keep the cleaning and repairs to a minimum so you can capture spring break bookings. Since you won't have any reviews, your listing won't rank for some time, so you don't want to be postponing that any longer than needed. If you buy one fully themed, it is going to cost you upfront, but no real downtime to block off dates and lose revenue. There is such little inventory, you may not be able to choose themed or unthemed. I put an offer in this week in Championsgate and there were 17 other offers. So count on an appraisal gap, most listings are requiring no appraisal contingency. 

If you do get one that is not so themed, there are shortages in everything you need..labor, furniture etc. So if you block off dates from your calendar (have to do this far in advance), you run the risk of having no labor when the time comes, furniture comes in late or broken etc. So I would try to tackle one room at a time to hedge the risk of long down times and bad reviews. May is typically a slow month, so if you buy now, plan for anything big then. It may be better to get things you can now and store them so at least you know what you will be able to do and plan for the trades to get it done.

Hope this helps, good luck

@Chris Fore. Anytime you lend money, you are going to want collateral. In Real Estate, that comes in the form of have a promissory note from the flipper. 

Just think of yourself as a bank/mortgage broker. When you purchase a home, they make you sign a note and a mortgage. The note specifies the interest rate and length of time to repay. The mortgage gives the bank/lender the right to foreclose if you don't repay. So for investors, you want to be in 'first position', meaning that if the flipper fails, you at least get the house and can resell or finish the project to recoup your money. 

What you want to be careful of is not being in first position. So just like a '2nd mortgage, HELOC or similar, those loans only get paid if the first mortgage holder gets paid and there is money left to pay the 2nd, 3rd etc. Some flippers use their own money to buy the house, but need private money to fund the rehab. So as long as the house is paid for (no mortgage) you can lend money to them and be in first position.

Hope that helps.

@Robert Iskhakov welcome to BP, you will find plenty of information right here to help you get started. Lots of podcasts, reading recommendations to help get you started. I would strongly suggest joining a REIA in your area and meeting locals that can point you in the right direction. You will find rehabbers, lenders, trades, landlords, wholesalers etc to show you where to look and how to do it.

I can't say I would recommend you doing your first flip 4 hours away from where you live. Maybe see if someone at your REIA will let you shadow them or perhaps you lend money to one on a project and instead of getting interest paid back, they teach you some things (just make sure you get a note/mortgage for your money). RE investors tend to like creative ways to do things unlike traditional real estate where you go to a bank, get a mortgage, find a realtor and buy a house. So I believe thinking that way when approaching your first venture will help you.

You will also need to think about what if you can't find someone to help you as I mentioned above. Will you buy from a wholesaler, look on the MLS with an investor friendly agent? What is your budget (wholesalers only take cash/hard & private money), do you have enough for purchase, closing costs, rehab and holding costs? The houses that wholesalers are putting out have very thin margins and being new, that is dangerous as mistakes could bankrupt you. Orlando and Tampa are saturated with Hedge funds, REITs and investors from all over the country snagging anything that is out there, so be prepared to look well outside of those metros.

Good Luck!

@Joey Brantley Thank you for your service and good for you to take advantage of your entitlements!  Just like Seatle, most any medium to large metro area that you look at will have the same issue. Inflated prices have made it extremely difficult to cash flow. Add to that the fact you are using a zero down loan product and it will look worse on paper. You will likely continue to get appreciation on the property, but cash flow in any of the 'hot' markets, like ours in Orlando really doesn't exist.

I might suggest (depending on your family situation) is to look for a multi-family property that you can offset the mortgage by having tenants cover most/all of it for you. Then, in a year, you can still move out and repeat. What this creates is another problem of budget and finding a duplex, tri or quad for $400 in an area that you (and your family) not only want to live, but also want to be a landlord in. 

Best of luck to you.

@Matthew Varga Orlando is a big destination for Canadian investors, so its pretty commonplace here to find good lenders and I have a few if you still need.

@Wilson Vanhook yes, there are dozens of communities zoned this way. Some do have resident sections and str sections. I have basically a tier type way to group them into highest demand/occupancy and amenities of the community to second and third that have descent amenities and maybe a bit further from Disney. I generally only like to recommned communities that are specifically zoned for STR. They are guard gated and have great amenities (think almost like an all inclusive resort). And they will always be 'legal' for short term. There are communities with low/no HOA, but you may run the risk of the HOA or local municipality banning or shutting down your STR.

@Wilson Vanhook I'm in Orlando and can attest that we are not capped out yet, especially if you would consider larger homes 5+ beds. There are much fewer of them than condos, condo-tels, and townhomes, so demand for those is still very high. When the planes start flying, our numbers here will surely beat most other markets. Orlando is much more year round than any beach, ski or mountain area that I know of and is literally built for STR. Hope this helps a little. Good Luck!

@Eddy Wehbe To maximize the benefits of an STR in the Orlando area, you will need to be as close to the parks as possible. Most of the communities are in Osceola County, but Polk and Lake also are friendly and have some communities. There are different 'levels' of communities, those that allow it (but HOA could change that), those that allow it and are zoned and those that are built specifically for STR and the zoning won't change..these communities are guard gated, have resort amenities like lazy rivers, restaurants, arcades, volleyball, flowriders and a couple have golf.

Inventory is very tight and prices are high right now, so picking the right community is your first step. Depending on your strategy, picking the right type of unit will also matter (condo, townhome or single family). Virtually everyone of these properties come fully furnished and have bookings that you could take over if you choose, so you can hit the ground running.

Good luck!