All Forum Posts by: Stephen Dispensa

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.  

Here is what you can control:

1. The price you buy at through negotiation

2. The condition of the property through renovation

Here is what you can't control:

1. Interest rates

2. The underlying market conditions. 

The good news is, the current market offers the exact type of opportunities we should be looking for. Overpriced properties (that were initially priced and marketed when cap rates were lower) and rental rates that continue to rise. Now is the perfect time to be aggressively hunting multifamily deals. There's still plenty of room for value add. 

The guys who are in the worst position to get burned right now are developers who started working on projects when money was cheaper and now are seeing loan issues on their refi's. But guess what? As they abandon projects or slow down progress, guess who needs work? Contractors. And if you can pay guys cash for quick apartment remodels, it's become easier to find that labor for less right now. 

So what we're really seeing is a great environment to make deals happen. The whole trick is to make thoughtful offers that really show the seller what the property is actually worth. When you make a fair, educated offer to someone who's been sitting on the market for 90 days or more, chances are they entertain it.

 DM me and I'll send you the info and a copy of the relevant court cases. I'd rather not make a public forum post on something that is searchable on Google, etc. just to not open myself up to and possibility of libel seeing as these cases are ongoing.