All Forum Posts by: Brad Bartlett

Thanks Russ and Kristopher. I'm going to pass on the house as a rental. I'm now looking into flipping it to a spec home builder I know. I believe the lot will be able to be split into two .5 acre lots which should be appealing to my builder friend.

I have come across an unusual construction type I am not familiar with. I need some advice. A family friend has offered me a property that may be a great deal. It's in a major university town in Florida. She wants $47k for a 3/2, 1500sf, on 1 acre at the entrance to a subdivision of houses that sell in the mid to upper $200k range. Some houses in the subdivision are valued over $300k. The property is on a major city road indirectly located between a major university and a smaller college. Zillow estimates the house is worth $157k. I'm going to run some comps from the MLS tomorrow, but the construction type is unusual, so I'm not sure how useful the comps are. I would use it as a student rental property. If it was a conventional house, I could rent is for $1,200/month. I plan on paying cash. Sounds pretty good, right?

Now the property negatives. The house is a concrete geodesic dome house built in 1972. Even the carport/garage is a concrete done. I know very little about dome homes. I have heard they are strong and energy efficient, but other than that I know nothing. This house has been vacant for at least 3-4 years. Trees have grown up in the yard to the point you can’t even see the house from the road. The property appraiser just changed the parcel to a vacant lot. Since the house has been vacant so long I will be required to bring the electrical system up to current code before a new power meter is installed. The windows are original. I’m sure the kitchen, bathrooms, and all flooring will need to be completely redone. I’m going to see the inside of the house next weekend and estimate repairs costs (I don’t live in the same city as the house).

My questions are:

• How difficult is it to work on a concrete dome house? I have experience with building/rehabbing stick frame homes.
• Will I need a specialty contractor to rehab the house and bring it up to code? I’m not sure if any contractor is up to the job.
• Will I be able to finance the house and pull my cash back out once the rehab is complete?
• What is involved with getting the property appraiser to show the parcel has a house?
• How much below market rent would I need to be to rent a geodesic dome home? I plan on making it look like a cute cottage, sort of like a hobbit house.
• I’m told there may be a water leak in the living room. I didn’t think concrete homes would leak. What is involved with repairing a roof leak on a concrete dome home?

I think the lot is worth the asking price, but I’m not interested in knocking down the house and building a new house at this time. If the house can’t be rehabbed, I’ll pass on the deal. Any advice on dealing with a concrete geodesic dome house is appreciated.

Hi Jason.

The Florida markets are very competitive, but also provide good opportunity. You probably are already aware of the opportunity as you have focused your search in Florida. Properties are selling quickly. Two of my friends recently had offers on their properties within 48 hours of being listed. Those offers from other investors led to closings on their properties. I know people making offers on homes without seeing the properties. Investors and home owners alike need to act quickly on new listings. The good news is properties are appreciating well and there is strong rental demand. I hear from people from St. Pete to Sarasota constantly complaining how hard it is to find a house to rent. There are hundreds of houses being built in the area I live. If you come across a quad that provides a decent IRR, jump on it. They are rare.

I’m interested in discussing a few questions with you. What kind of price range are you looking for? Are you planning on working in the area and living in the property part of the year? Have you considered a seasonal rental? Have you considered building? What are your long term goals? I normally recommend professional PM for out of state owners, but the hospitals communities are pretty close-knit. If you advertise your rental within the hospital community, you are likely to rent to a fellow hospital worker and have good results without property management. My wife works at a hospital and there are always people with good income looking to rent. It’s also possible to find property for sell before it’s listed within the hospital community. If you manage the property yourself, you will need to be familiar with Florida tenant-landlord laws.

PM me if you want to discuss anything. I think I can give you a few ideas to think about.

@DJ Cummins

Way to go with the mailers. You’ve inspired me to send out mailers too. What made you decide on those two apartment complexes?

I agree with @Brandon Turner and @Vanessa Vandervalk. Use the first meeting to find out what the seller’s goals are. The seller may want cash up front; maybe they want monthly income without the headaches of collecting rent and fixing toilets. For example, if the seller is stuck to a high sales price, structure the deal where you give the high sales price but get cheap financing in exchange. Find out as much as you can to structure a win-win deal. If you can structure the deal in a way the seller gets what they want and you get what you want, you’ll soon the proud owner of a 24-plx. Please keep us posted. I’m very excited for you.

@Jose Gonzalez

There are property managers for any kind of property. In my experience most MHs with land are rural. You are not likely to find a PM willing to take on just one or two MHs in a rural area unless they live nearby. A couple years ago in Levy county, MH owners were having a very difficult time finding anyone to management their properties. One owner offered a friend of mine 25% of income to manage her two MHs. My friend, a Realtor, declined.

I have seen some MHs with amazing cash flow. You’re likely to have challenges with finding tenants with good credit, high cost of repairs due to MNs requiring different size doors, toilets, tubs, etc./, and also finding management. Also, remember the MH won’t appreciate like a stick built house. If you can buy the MH right, and overcome management challenges, you may have some good cash flow. I wish you the best.

@Mark Ferguson

Have you thought about moving into multifamily? Often when owner get 15-20 units they start looking at moving into multifamily to take advantage of economies of scale and higher returns. Multifamily in Florida or Texas may be worth considering.

@Larry Glenn

Yellow Letters has a bunch of pre-written letters to choose from. I’ve received many of these before, so I’m guessing most people use the form letters. I too am interested to hear from experienced mailers to know what works. I’m preparing to send out a letters looking for multifamily properties to buy. I didn’t see any multifamily letter examples at Yellow Letters. Could someone who has sent out multifamily letters discuss what worked?

@Dominic Jones

I would like to add some clarifying remarks. I know Florida license law but not other states. Florida has two types of real estate licenses; an associate and a broker. In Florida, which I think is true in most states, an associate must work under a broker. The broker receives all commissions and then pays the associate. The benefits of being a broker is not being at the mercy of a broker and not having to split your commissions. A Realtor is a licensee that is a member of the Board of Realtors. You can join the National Association of Realtors as an associate member, but I don't believe you are a Realtor without being a full member. The Board of Realtors offers great classes and training, but it's up to the individual licensee to take advantage of the classes. Various designations can often tell you which Realtors continue their education and skills. A Realtor will have MLS access. You can have MLS access and not be a Realtor, but it's a pain and rare to see in Florida.

In Florida you only need to have you associate license “hung” under a broker license for 2 years before you can apply for a broker license. In Florida, your license must be active for those 2 years, but you don’t have to actively work in real estate or close any deals. I suggest you see if DC law is the same. You may want to consider getting your real estate license before you go overseas. If DC law is like Florida, you could hang your license with a real estate referral service for a very small annual fee. That way, when you come back to the states, your license is active and you have already met one year of the three year requirement in DC. You wouldn’t be able to practice real estate with your license hung at a referral service, but you could earn commissions for referring people to Realtors. Once you return to the states and want to practice real estate, you find a broker that will let you hang your license. It’s just an idea in case you think there is a possibility you may someday want a broker license.

@Joshua Beall    

I’ve also had real estate listing agents refuse to present some of my offers to the sellers. Per Florida law, the sales associate/broker must present ALL offers to the sellers. It’s against the law, but they still refuse. I know some of the offers were low, but the sales associate is not a mind reader and doesn’t know for sure what the seller will say. It’s very frustrating.

If you were thinking about getting your license to learn about investing and make a little money part-time, my advice would probably be not to get your license. One reason is you'll be required to join the same MLS and board or Realtors as your broker. That and other required expenses can add up fast for a part-time investor.

In your case, you seem to have a broker that will let you hang your license which is one of the biggest hurdles for a part-time real estate associate. You will want to verify Long and Foster will take part-time associates. One advantage of having your license is when you act as the buyer’s agent for yourself as the buyer, you can use your commission as part of your down payment. You love the idea of showing housing, helping people buy houses, and you think you may want to sell real estate full time. I think you should get you license. It appears you want your license for all the right reasons, and if you don’t, you may always wonder what could have been. The worst you have to loose is a little time and money.

@Steve Borodin

Hi Steve. Welcome to BP. I have a few questions you will want to think about before looking at properties. What type of rental property are you looking to purchase; single family or multifamily? What is your price range? What rate of return are you looking for? What is your hold period? Are you looking for turnkey or are you willing to do some rehab? Are you looking in the city of Tampa or the greater Tampa Bay area? There are many sub-markets of the Tampa Bay area that are very strong rental markets. I look forward to meeting and discussing your goals when you’re in Tampa.