All Forum Posts by: Matt Leber

@Hannah Krebs check out the housing and urban development (HUD) website for 2020 fair market rents (FMRs) for the zip code the house is in. If the HUD website doesn't have it down to the zip code level, they will have a listing for the metropolitan area. They will have fair market rents listed for studio though 4 bedroom homes. This can give you an idea.

@Vanessa Eckhof you might need a co-signer as others have said. If you are going to be living in the house for at least a year, it’s your primary residence, no need to tell the bank you ‘might’ rent out some rooms.

My advice would be to buy something where the numbers work as a single family rental if you move out. You probably will be able to make more money by using the rent-by-room strategy (and you should totally do this for as long as you can), but don’t base the purchase price level on profit generated under this strategy. Residential codes and laws can change, you might find out that having 3 unrelated persons under the same roof long term is technically violation of local code (it was in Gainesville at UF). Or you might decide one day that having 3-4 students under one roof is a lot of turnover and headache to manage if you aren’t around. I would run the numbers as if you are renting to one family, and buy a property that cash flows well under this more conservative strategy. That way if you ever decide to steer away from rent-by-room strategy, you will still have a property that cash flows nicely for you. It’s good to have options.

@Chris Ambs haven’t used foreclosure.com but we did get a pretty sweet foreclosure deal in Lake Nona area Orlando on Hubzu.com. I still see some interesting properties post there from time to time.

Thanks all. My thought was to post it to get the clock started in my favor today once the ban is lifted. That way once the ban is lifted we don’t have to do the 3-day dance before starting the eviction. Non-responsiveness is simply not an acceptable option for the tenants.

@Jeffrey Townsend agree with John here. I would submit for a rent increase with section 8 and take the guaranteed money. Take the guaranteed rents now during this rainy economy and let the cash flow pay for the reno down the line. If the units are passing section 8 inspections they must be in OK shape.

@Bryan Stovall the reason I am looking for this data by zip code in Orlando or Orange County is to see if I can identify which zip codes have the highest rent-to-purchase price ratios. If I could identify a pocket in a transitional neighborhood that has a good rent cap, it would interest me. We just pulled off a deal in Brevard County Melbourne FL that had a rent cap in the mid $1400s (guaranteed funds through section 8) that we were able to purchase under 100k. I’ll take that kind of ratio all day in central Florida and if it’s section 8 at least I’m hedging my risk a little bit in these economic conditions.

I have been fortunate enough to collect 6 out of 7 rents in April, but I still have one tenant who has not paid and has decided to cut off all communication with my property manager. His lack of communication, in my opinion, is inexcusable. I have reached out to my property manager to post a 3-day notice, and have been told they cannot post notice due to the eviction suspension.

I immediately called B.S. on that response from PM, a 3-day is not the same thing as an eviction. In fact, it might be just the perfect way to get through to my unresponsive tenant. I’m happy to waive late fees or work out a payment plan, just can’t have the tenant stonewalling me.

Am I right? Is there anything in Florida, specifically Jacksonville, banning posting of 3-day notices? Is my PM wrong here?

@Tyler D'Alessandro I am out in Central Florida so the 1% rule works in my markets. But it’s more of a tool that I use to create a funnel or filter of properties I look at, so I’m not overwhelmed with analyzing everything that’s on the market for cash flow. Not every 1% rule property is good or bad, it boils down further to the real numbers.

@Elliott Back when looking at homes online, add ‘office’, ‘sunroom’, or ‘bonus room’ to your keywords in the search. If the room structure is already there, it could be as simple as adding a closet or a window and making sure it’s under air. Occasionally you’ll see homes listed with 2 or 3 bedrooms that have a lot of square footage. Sometimes the number of bedrooms is listed incorrectly. One of our rentals is a 3 bedroom house that to our surprise had a legitimate 4th bedroom being used as an office space. It was a foreclosure sale by a bank, so I bet they never stepped inside to see that a 4th bedroom had been added to the footprint sometime over the years. That surprise room is a game changer because it allows me to get an extra $200 in rent each month by listing as a 4th bedroom.

@Bryan Stovall Appreciate it!