All Forum Posts by: Mike McGee

I have a portfolio of 4 SFR, 3 in Metro Atlanta Georgia area, 1 in Quad Cities Iowa area. I'm thinking about selling them all.

Why am I selling?

- I recently got into STRs, and I like that business better. Plan to 1031-exchange into an upscale STR.
- One SFR had a tenant just move out, another is going through an eviction, so with half of the portfolio vacant, it's decision time.

I'm trying to decide whether to sell them as a portfolio (at least the 3 Georgia ones as a portfolio, Iowa would probably have to be sold separately), or get the other 2 empty, fix them up and sell them all to retail homebuyers. 

I have been approached in the past by investors who want to buy the Atlanta portfolio, but they always want to buy at a discount. I get that, investors get a deal and I get the convenience of selling them all at once. However, I'm starting to think I can get much more selling them individually to owner/occupants. Here's why:

While rents have increased, the home values have increased even more. So, the Georgia home values are way above the 1% rule.
House 1: Market value: $280k.   Market rent: $1945
House 2: Market value: $250k.   Market rent: $1685
House 3: Market value: $210k.   Market rent: $153

So, if I have to reduce the prices to meet the 1% rule in order to sell the portfolio to an investor, that's a steep discount! I think it might be worth the trouble to fix up the other two and sell them all to retail homebuyers. That is, unless investors are now willing to pay more than the 1% rule used to dictate.

I know it will cost some time and money to get them vacant and fixed up, but the alternative seems to be to leave 10s of thousands of dollars on the table. I'm a broker, so commissions aren't a factor, and there's no loan on the Georgia properties.

What do you guys think? Am I missing something?

Thanks everyone. Lots to consider. Totally get the cost seg angle, but I'm just ready to get out of the LTR business, hence the 1031. I've had great appreciation on them and would like to hit the ground running on a Florida STR, rather than create one from scratch. Does anyone have an STR on the Gulf coast that's on the market, turn-key with a solid track record? Price point $600k - $900k.

A couple of years ago I sold an LTR and 1031-exchanged it for an STR in the NC mountains. I have grown to really like the STR business! Now I want to sell a handful of LTRs and buy another STR, this time preferably in Florida. I like the Punta Gorda / Charlotte county area, but I'm open to other markets.

As far as STR’s in FL, seems like everything is somewhat seasonal. The panhandle is seasonal - busy in summer for beaches, slow in winter because it’s too cold. SW FL is seasonal the other way - busy in winter for northerners escaping cold, but slow in summer because it’s too hot.

Seems like there should be some place in FL that’s a happy medium. (I'm not really interested in the Orlando/Disney market.) Any other suggestions for less-seasonal Florida STR markets?

Thanks!

SF or duplex. Might consider townhouse/condo if HOAs were reasonable and had no STR restrictions. Gulf access canal front would be great. Something that already had a proven track record as an STR would be ideal.

 I'm interested in Charlotte county. There was no forum for that, so I posted in the closest one I could find.

I'd also like it to be a winter warm-weather get-away. Coastal SC, GA, AL and even the panhandle of FL are all too cold in the winter. JMHO, YMMV. 

 Thanks! Sent you a PM.

 Funny, I'm from Florida and my wife is from the Midwest! I'm used to it, she's not!

I want to buy an STR in southwest Florida. My wife is very concerned about the insurance costs and the hurricanes which drive them up. I'm trying to find a way to search only for properties that have maximal hurricane mitigation (elevated out of flood insurance requirements, impact windows or shutters, roof up to current code, etc.) to keep insurance costs down.

Is there any way to search for only properties with these mitigations?