All Forum Posts by: Stephen Dispensa

Yup, definitely steering. You'll learn all about the advertising rules in your real estate course and learn even more in  your post-licensing course. A rule of thumb is that you really shouldn't be giving your opinion. HOWEVER, you can state facts. You can't say "This area is a nice part of town." You CAN say, "Average home values in this area have appreciated 20% year over year for the last three years."

Kristian,

I know it's tempting when you first get started to want to do this type of paperwork yourself to save costs. However, considering the sums of money involved in real estate transactions, it really is prudent to utilize outside counsel for this kind of work. 

I flipped 26 houses between 2018 and 2020, mainly with investors that were part of one of the real estate "guru" networks. They all use "unlimited" memberships with Anderson Advisors (https://andersonadvisors.com/) Basically since they often were setting up several LLC's per year, Anderson had the attorneys and tax people to help set up the LLC's, create the operating agreements, and help structure their organization for both asset and tax protection. Another advantage if you are going to be working on a lot of deals in using a service like this, is that they have LLC's waiting on file. (If you try to file a new LLC in most states you are waiting weeks to months for it to get processed, which isn't helpful if you need to close on a house next week).

I'd recommend finding a service like this if you're going to be doing a lot of deals.

If the MLS has a contract and a section allowing you to market a sales agreement, sure. Literally not a single MLS in the country has such a thing. So to answer your question, no. Marketing a home for sale on the MLS when you don't actually own the home is considered fraud on both the wholesaler and the realtors part. Could result in not only the realtor losing their license and board membership, but possible criminal charges for both the realtor and the wholesaler.

There's probably people who have gotten away with this in the past, but all it takes is one deal going wrong and the whole thing blows up.

Hi Tammy,

I think part of the confusion that arises here sometimes, is that there is no "license" for a developer. Literally anyone can develop land as an active partner in a development project and hence declare themselves a "developer". Licenses are needed for a lot of the people involved in the process though, such as the General Contractor, Engineers, Tradespeople, the Architect, and the Real Estate Sales Professionals that eventually market and sell the property for you. 

Quite often I see people hire a General Contractor and expect them to handle the development functions. This is generally not a great idea as most contractors do not understand or specialize in this part of the process. Think of the developer as someone who oversees every aspect of the project from the second the land is purchased until the final lot is sold. The contractor really just specializes in building the project once you have an approved site plan and building permit in place.

 Your best bet would be to team up with an experienced developer to help you with your project. Some architects that have experience in development can also be very helpful in this process.  My architect has a great team of structural and civil engineers he works with to turn around development projects quickly. 

If there are no probate issues and you can do a straightforward sale, you are not required to use an attorney in Florida. However, I would recommend utilizing a title office that is based in a real estate attorneys office in case any issues come up. It can save you time and money in the long run, and if there's no problems with the transaction, you won't need to utilize the attorney's services. 

Did you guys do any value-add renovation on your property? 

I have a client who put roughly 120k down (including closing costs) on a fourplex 18 months ago. We renovated two units at a cost of approximately 15k per door. We raised rents considerably and they were able to pull out 200k on their refinance about 14 months in. Wound up at a slightly higher rate but the property is still cash flowing better than when they purchased it.

I don't know what the situation is with your first property in terms of condition, rents, potential for value add. But sometimes it's well worth investing that 15k to 20k if it means being able to pull out 200k for another investment. 

Sounds good Luis, 

Yeah you probably were a little high. I like to drop my rental rate by $100 every week if I'm not getting applicants until we find someone. 

Hey Joey,

I manage properties in Port Tampa City and we are getting above $2k per month for 2br / 1 bath apartments so I think you can do better than the numbers you are suggesting on a rental. 

Personally, my strategy would be to do a light rehab to make it presentable and maximize rents. Put new tenants in place with maximum cash flow, and then begin planning for the two new homes. Once you get planning approved, you could sell off the land and development package to a developer, OR build it yourself. I have solid experience in all of these areas if you want to shoot me a PM for more specifics.

Steve

Hi Pratik, 

The good news is with PD-A you have some flexibility on the land use. Are you familiar with the Tampa 2040 Comprehensive Plan? It establishes the future land uses for many districts. With PD-A or Planned District Alternative you can use the land for a variety of uses, but have to go through an alternate review process. It may allow for more flexibility based on the performance standards the land needs to meet. Send me a PM if you need more info.

Steve

As a property manager, I generally advise against first/last/security as it starts to seriously limit the pool that we draw from in the Tampa area. Plus, if you go to any large complex, they are almost never charging that much to move in. If your unit is renting for 2,000 + per month, you're talking about $6,000+ upfront for move in. My experience has been that becomes harder to come by from tenants, and limits the pool of potential applicants. 

Renting an apartment is not unlike any sales transaction. The greatest motivator is a diminishing supply of something you want. So ideally you want a situation that will produce the most applications, so you can choose the best one. I would say the most typical situation here in Tampa for a 1/1 is first months rent and security up front. Typically security will be somewhere between $500 for applicants with solid credit, to 1 months rent for applicants with fair credit. Applicants whose credit score dips below 600 you need to scrutinize a bit to figure out why their situation is where it is and if it's someone you want to work with. If a tenant has credit issues but shows solid income, I'll usually ask for a higher deposit.