All Forum Posts by: Samuel Leatherwood

What would you conservatively estimate the main home/rental in the back would bring in on a monthly basis? 

I know the area pretty well and seems as though $1900 would be conservative for the main house. You did say you put $70,000 into it, so maybe it is a nicer unit and could demand more. And then you have the other property. Long-term rental you are probably looking at maybe $1400 conservatively. Obviously it is a unique build but it is also small, so let's estimate low. So, all in you could conservatively bring in $3400 gross income. Granted, this could be substantially higher with a successful STR & if your primary is more of a luxury rental, but just estimating conservative for the time being.

What is your debt going to look like on a monthly basis for those properties including the refinanced mortgage + loan + etc.? 

It is hard to know what would be a good decision without knowing some more details. Good luck!

 For comparison purposes with AirDNA, wouldn't it be more accurate to say that place that you linked to rents for closer to $300/night? My understanding is that AirDNA includes cleaning fees in their gross income projections. The listing you shared for two nights is $283 +$339 cleaning fee = $622 / 2 = $311/night. 

Hey Dillon, 

I have been to GOREIA (Greater Orlando Real Estate Investor Association). There are lots of people to meet with and talk with there as well. The main monthly meeting is free and open to the public whereas some of the other meetings require membership. 

Congrats on graduating soon. Find ways to live cheap for the first year once you get employed and save up a nice bit of cash for your first deal. Good luck. : )

It sounds like you are looking at all of your options for your next move, so I am sure you will find/create an opportunity soon. Gas money, haha. I didn't think you would be interested in those numbers--I was just reiterating/confirming your experience running the numbers when you said "most properties are CF around a couple hundred a month." There used to be solid CF deals in the Daytona (Volusia) area a few years back but I imagine that situation has changed drastically. I also like the ADU idea if you can find the right contractors for the job. I have gone through quite a few trying to find the right ones to add onto and build out a detached garage as a small apartment and even getting those numbers to pencil out requires prudence.

Hey @Zach Jones. 

I've spent a lot of time analyzing the small multi-family market in Central FL and I am seeing the same thing. As you know, there are a small number of triplexes and even less quadplexes that come on the market (at least in Orange County). As far as duplexes go, you are spot on that the average price for a duplex is between 4-500k. If you buy and rent both sides, you are likely to break even give or take $200 dollars either way depending on capex and vacancy. 

House-hacking can still make sense if the alternative is to buy and live in a similar sized single unit in the same neighborhood. For simple numbers, let's say PITI on the duplex is $3,000 and a 2/1 or 2/2 SFH might run you $2,000 PITI. Let's say you can rent one side for $1,500 then you are on the line for $1,500 a month. Even with some vacancy/repairs, your cost of living would still be a little cheaper while building equity on the principal pay down + capturing appreciation on a property worth 150k more than the SFH.

Hello, Alex. 

As many others have commented, doing a LTR on a new construction single-family home in Central Fl will likely pull cash out of your pocket for a couple of years once you account for vacancy, property management, and capex. If rents go up &/or if rates go down in a couple of years you could be in a different situation. Value-add properties can pencil out better if you have the capital/team but there is added risk there as well if you are not experienced in underwriting those sorts of projects. Would you be open to small multi-family if it were in a similar price range? You are more likely to generate small cash flow or at least break even on those at the moment.

Hello Ace, 

I am not sure what your actual property taxes and insurance would be but I used some estimates based on my familiarity with the area and without accounting for property management or vacancy/collection loss you are looking at a cap rate of around 8.5 to 9.5 depending on what you allocate for cap ex (1% vs 2%, respectively). 

If you add in property management, that brings you down to 8.5 to 7.5 (once again depending on how you need to allocate for cap ex based on the condition of the property). If you add in vacancy/collection loss you are probably breaking even on a monthly basis. 

Everyone will have a different opinion on whether or not this is a "deal." What are your overall goals? Do you have a place to put your money that can generate a better return? How confident are you in 4% appreciation? How confident are you that rents are below market and can be raised without adding additional capital? If rates come down to say 5.5% in 2-3 years, how does that change the prospects of the deal if you include the cost of refinancing?

Small world, Joel. I just drove by Lake Highland the other day and it looks like they just completed a large expansion for a tech-focused wing of the school. I am also in Orlando. Good luck!

Hey, Joel!

What exactly are you looking to do with these lots? I was having a little trouble parsing your plans from the current post. 

I am in Orlando and I have been getting bids at 250-350/sq foot depending on quality of finishes.