All Forum Posts by: Roger H.

Hi Jennifer,

I also have a condo that I rent seasonally in FL although I'm local. In my experience HOA's will do nothing to help your tenant with any issues renters may have with your unit. You will have to handle any questions / issues that arise while they are there. Don't know if you want to go to the expense of a property mgmt company as most will just act as a middle man and don't have the resources in-house to take care of things like AC, heat, plumbing and other issues. I would suggest finding some good contractors, (Handyman, AC guy, Plumber) who you can call when / if an issue arises.

I'm sure others that monitor this forum can offer other opinions. 

Rgds,

Welcome and hope you succeed with your plan.

Majority of the condo's down here 55+ and non 55+ have put plans in place to dissuade investors as they have a 1 - 2 yr no rent clause in their by-laws. So if you focus on condo's you will have your work cut out for you.  Additionally your not going to find anything in the better neighborhoods at $25-$40k and may not find anything. What you do find will probably not be the type of condo development you're going to be happy with (IE Lots of problems w/ neighborhood and tenants).  Would suggest you raise your target prices to $60-$75k or higher which would put you into better neighborhoods with better tenants. Or look at 3/2 single family homes that you can buy, rent or flip.

You may want to ask around and see if someone is interested in the deal. While I wouldn't be interested in buying that particular property you may find an investor here on BiggerPockets or area real estate investment groups that would pay you a percentage for putting the deal together for them.

Remember there's lots of ways to make money in real estate. Buy and hold is only one of many.

Keep on trying.

Hi Brock,

Need a bit more information but based on $2400 mo rent roll it could be a good buy. Lots of things to consider review before purchasing. Has your broker or owner provided list of expenses / operational costs and have you verified them for accuracy. 

Additionally you haven't calculated taxes properly. Do a search for Palm Beach Tax authority and look up the address for current taxes. Then use the tax calculator to get a guesstimate on what your taxes will be for 2016 tax year. I see it as ~$420mo in RE taxes for 2016 based on a $250k purchase price.  Also figure a 10% increase in the appraised value year over year as the taxing authorities will likely bring your appraised value to the allowable maximum for several years. 

As far as mortgage, Since you appear to be 1st timer and the banks will likely be looking at your personal income to pay the mortgage more than the rents you feel you would collecting and using towards your mortgage payment. So talk to a couple bankers / mortgage brokers and see what they would want to see in order to qualify this property for a loan.

Also what type of fix-up / rehab do the units need? Not having any pics of the interiors always make me leary as they're usually hiding something by not posting pics. Other things I like to look at is age of all mechanicals, roof, etc as there may be a need to replace, repair these items sooner than later. 

You also need to calculate insurance for fire, vandalism, liability, hurricane etc which will be a higher than a single family residence. Call your broker for an estimated quote.

Finally you should also take some of the free webinars, download some of the analysis spread sheets from file place and use the calculators here on BiggerPockets. These Webinars / tools have helped me learn a lot.  I believe you can use the calculators up to 5 times for free and is unlimited once you become a paid member.

 Best of luck on your endeavors...

Hi Lynn,

Thanks for the suggestion on padmapper. Very interesting site and seem pretty accurate on area rents.

Hi John,

Thanks for your response and the rule of thumb calculations.  Rentometer will allow you a couple basic rent searches a day but think it flags you and asks you to become a member after 3 - 4 requests. Will look into Craigslist.

 Will PM you later on the property management piece.

Thanks again.

I've attended a couple Webinars (Thanks Brandon!!) and have a few questions related to calculating deals.

I'm in SE Florida (Palm Beach County) so rental activity is pretty high but seems montly rentals on properties are a little low.

Q1: Is there a general rule of thumb anyone uses for calculating rehab costs, (paint, carpet, etc, )?

Q2: Where do you go to get an estimated or better yet actual rent I might be able to get on a property I'm considering? Have tried Rentometer but they now want to charge $9 - $29 mo. Wouldn't object to a site that I pay per property while I'm getting up to speed.

Q3: What percentage do you typically use for vacancy calculations?

Q4: Any recommendations for property management companies in my area.

That's it for now and look forward to hearing from you.

Hi All,

Thanks for your comments and suggestions.

@Joel Owens, As I'm just getting into RE investing I plan on managing a my initial 3 -5 properties (when I get them) to understand firsthand some of the landlord tenant issues. Then I will certainly look for a prop mgmt company to handle these and other properties cause like you I really don't want to work for my investments.

@Matt Devincenzo, I appreciate your offer to look at some of the numbers so here's the foreclosure numbers. It's a condo so HOA covers hurricane ins, water / sewer, landscaping, etc.

Heard from bank this morning and they rejected my offer. Will rework numbers and possibly make another offer of $100k.

Ask $114,900

Offer $95k
Dwn 20%

Monthly exp:
MTG: $368
HOA: $256
TAX: $152
INS: $77
Misc: $100

Monthly rent: $1250

Based on above annualized ROI is 18.7%

Now if I assume a realistic 5% vacancy monthly rent averages $1187 for a revised ROI of 14.8%.

No closing costs included included as I figure I'll deduct these from proceeds when I sell properties in 8-10 yrs.

Are there other expenses I should be calculating into my models?

Thanks,

Hi Folks,

I've been reading the beginners guide as well as reading BP forums and visiting some members webpages. I currently live in NY but looking at investment properties in SE Florida as I winter down there and I'm looking to relocate in 1-2 yrs. I'm looking at RE investing for the longer term and plan to buy and hold for 8 - 10 yrs maybe more.

I'm wondering what kind of returns successful investors want to see on their properties before pulling the trigger and making offers. To date I've made 2 offers (one short sale & 1 foreclosure) and still waiting to hear back on both.

One the short sale after expenses of Mortgage, HOA, Ins, misc upkeep and collecting monthly rent I'm looking at 20% annual return on my down payment. The foreclosure after looking at same expenses and rent I'm looking at 18.75%. Am I setting my profit margins (annual ROI) too high?

Based on what I'm reading in the beginners guide the rule of thumb is to collect monthly rent equal to 2% of purchase price and currently with both properties I'm at about 1.2 or 1.3% of purchase price. Wondering if I should get closer to sellers asking price, make a little less in the first 2 or so years and look to make my profits on the tail end when I sell the properties in the future.

Thoughts??

Many Thanks,

Roger

Hi,

Thanks for your prompt replies. Did find a FDIC link on one of the other forums for smaller regional / community banks that may be interested in financing.

The fun begins !!!