All Forum Posts by: Mitchell Miracle

I actually pulled the plug in the deal because Marion County wanted me to tie into the sewer main.  Added 104,000 to the project.  

The total project was for 4 duplexes. They were 3/2’s instead of 2/2’s.  Also, the new ones that were 419,000 are all sold.  They were being built by Southern Impressions out of Jacksonville.  He will not build a new one now for less than 525,000 and is no longer spec building them. 

Jay. The pullback I am speaking of is in building costs, rental income, and in acquisition costs. I feel like we are at top of markety for all three. I like your comment that if it pencils it pencils. I think that is my issue. It barely pencils. 7% CoC is not strong. 1.25 debt to income is not strong. It is acceptable on some large deals but not on this deal. I think I can wait and acquire property at a better return if there is a drop in the market. Thanks for the reply.

Chris E.  I do not live in the Ocala area.  Just invest there.  Not sure if they have any meetups.  

Everything in the Ocala market is over priced for the most part. Rents have risen substantially over the last year, however, housing prices have as well. You are not going to find an "on market" deal because anything that is decent gets snatched up within hours of hitting the MLS. I know several brokers that have buyers (lots of them) but cannot find inventory to sell to them. Builders are moving like crazy to meet the demand. I gave up on finding anything to BRRRR. I decided to build 4 duplexes on two lots that I own instead. Upside is I get new units with no capex for some time. Downside is I am building top of market and I have to leave a ton of cash in the deal. Good news is that if you do find a deal you can rent it immediately.

@Clay Lehman. Sounds good

Also,  PM me if you have any sellers.  I am always looking.  

Thanks for the insight. Based on the number of available R3 lots right now (non) I feel pretty safe building. Also, Marion County HUD is not predicting any pull back in new residents moving to Ocala. They have put together a task force with several banking and real estate professionals to address the growing concerns in the market for affordable housing options. I guess my biggest concern is that I build and then 10 Multifamily properties come on the market that I could snap up if I had not shot a cannon ball at one project. FOMO is a powerful deterrent. Lol

Thanks Clay.  The concern two fold.  If I wait I may be able to build for less.  Or, if there is a major pull back (20%) can I buy existing for less than the cost to build?  As you know being in Ocala, the rents are finally at a level that support new construction multi family.  I like the idea of no cap ex for 10 years I just see a ton of small multifamily being built in that market and fear a pull back in rental rates due to over saturation.  

I have been looking for deals in the central Florida markets for months with no luck. I currently own a triplex and quad in Ocala and would like to buy more. The market, like many, is exploding. Low low inventory means no good deals. I have tried driving for dollars and cold calling owners with no luck. Heck, I got 4 cold calls in two weeks myself on the properties I own. So, I am considering building. I have the lots under contract and can build 2 duplexes per lot for a total of 8 doors. 20% down financing at 4.5 for 20 years fixed (no ballon in 5 years). Numbers look ok: 1,000,000 build. COC of 9.0%. Cash flowing $208 per door after all expenses and reserves. All looks great. My only concern is will there be a pull back? If so, do I wait and buy then or move forward. I am buy and hold for at least 15 years. I have plenty of cash reserves but just don't want to be the sucker that built at the height of the market. Any thoughts will help. Thanks.