All Forum Posts by: Stephen Dispensa

I've been seeing some stuff go quickly here in Tampa the past few weeks. Couple of things I've noticed: 

- Some recently completed flips got pulled off the market and leased out instead, which drove inventory down a little.

- Seller's got more realistic about pricing across the board in January. 

- Market tends to heat up a bit down here starting in February, combined with lower inventory starts to bring back multiple offer situations. 

Getting multiple offers is easy enough. One of the first lessons I learned in Real Estate is "price it right and let them fight." 

Sellers will almost always want to list for more than what a property is worth. And this is always the biggest mistake you can make. When trying to get the highest price with the best terms for a property, you want competition among buyers. 

I always tell my sellers, imagine a hurricane is coming. You're well supplied, you've got a couple cases of water at home, you've got food and flashlights and candles. You're out at the store one last time before the storm hits, and you see a single case of water on the shelf, do you buy it? Of course you do. Because there is no greater motivator than a diminishing supply of something you need. 

If you host an open house and there's 50 people there, they're all concerned that the other buyers are going to outbid them. You've just made your listing the last case of water on the shelf before the storm hits. Let them fight over it and get yourself max dollar. 

So your options here really come down to what was agreed to in the initial lease. In Florida, the standard lease form created by the Florida Association of Realtors along with the Florida BAR (FARBAR Lease) contains a "Liquidated Damages" addendum. If you used a FARBAR Lease, or a custom lease that includes this addendum, it gives the tenant the option to pay liquidated damages up to the amount of 2 months rent (amount is set by the landlord) as a price for breaking the lease early. This is the "60 day notice" you are referring to which isn't actually Florida law or local law. 

Without electing to take this addendum, the tenant is actually responsible for the ENTIRE lease if he breaks it early. If his rent is 1200 per month, and he has 8 months left, he is liable for the entire $9,600 he owes you. You could absolutely take him to court and would likely win. Florida courts are far more friendly toward landlords than some states. 

However, as a property manager, my recommendation in this case would be as follows. If he has the liquidated damages option, tell him to pay February and you're keeping his security deposit, and let him out of the rest of the lease. It's literally what he agreed to.  If there is no liquidated damages option, tell him to pay for the dates in February that he's actually using and you're keeping his security deposit, and let him out of the lease. You're doing him a huge favor in this case and letting him off the hook for $8,400. You could go the route of court and garnishing wages to get the full 9,600, but honestly with a $1,200 a month apartment it's so easy to find a new tenant in Florida that why go through the hassle? 

Whatever you do, make sure you put it in writing. If you're able to come to a deal with the tenant make sure they sign it.

I'm based in Tampa and work with investors regularly as a broker/property manager/project manager. I still like small to medium multifamily in our market IF you're willing to make investments in the property. The opportunity here is mainly in value add. You need to be willing to invest in renovations and turning over tenants to get properties in this market to cash flow at a decent level. However, we've had great appreciation year over year even before the most recent boom in 2020. 

I would look into the "land use" on the county appraisers website as that will let you know if it's non-conforming use is legal or not.

You need to open a separate checking account. If you are in the state of Florida, this can be an interest-bearing or a non-interest bearing account, HOWEVER your tenants must be informed at lease signed the name and address of the bank where the security deposit is to be stored. You must also inform them whether it is an interest bearing or a non-interest bearing account. Lastly, you must inform them who is to receive the interest if it is in an interest bearing account.

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 Yes, couldn't agree more. The question is always is there a number that will work that this seller will accept where the buyer is going to be able to make a return. If the minimum deal I think the seller will take is not one in which the buyer can make a return, the analysis stops right there. 

The difficulty I have seen with inexperienced investors on more than one occasion, is they want to start with an offer SO low that it doesn't get taken seriously. This is a waste of everyone's time. Generally speaking we figure out the breakeven point and work backwards from there. Figure out a realistic number the seller will take, see where the returns line up at that number. Then begin offering at a starting point that we think will get us to our target number. 

I have it written on my wall, and I swear I'm gonna get it tattooed on me one day, "Deals aren't found, they're made."

When discussing an offer price with an investor, I generally suggest what an initial offer should be, and what is a realistic number that the deal will close at. There are a number of items I research to figure out these numbers. First, there's market conditions: comparables, rental rates, ARV, etc. Second, I want to look at any existing mortgages, how much does the seller owe on the property. Third, I want to try to find their motivation. Do they own 6 other properties and are in over their head? Are they going through a divorce? Sometimes the listing agent will give me some of this information, other times I'm searching property records, court filings, and social media accounts.

Point is, when I give an investor a realistic number they can purchase a property for, it's not a shot in the dark. It's a researched estimate based on a whole multitude of factors. If a buyer asked me to place a low ball offer below market price and the balance of a current mortgage, they're often wasting everyone's time. Now depending on the situation, I may still make the offer if it's something where we're on the borderline and a seller might feel the pressure and bring cash to closing just to get out of a property. But those situations are rare. 

I've been lucky to work with some great clients over the years, but I have fired clients many times as well. I often have to work on, analyze, and pitch 20+ deals for every one deal one that goes into contract. I don't know how educated your agent is, but if they're doing their homework you should heed their advice. If they're just writing offers and don't fully understand the investing process, find another agent.

I'm dealing with a similar situation for an investor. Firstly, check the status on the county appraiser's website. If all the units are listed, you shouldn't have any problems getting the non-conforming use registered with zoning. That does not protect you in the case of rezoning however.

There's a real issue that I see with how the zoning changes were enacted in Tampa, properties that clearly should have been used a buffer zoning between commercial and residential districts (small multifamily is ideal for these spots) were all zoned in the surrounding residential. Worse yet, the 2040 Comprehensive plan often does little to rectify this lack of buffer zoning. 

Last week I took an initial conference with the Hillsborough Planning Commission and they were very open to my case of amending the future land use for my client which would allow them to rezone and either maintain the nonconforming use or redevelop their site down the road without reverting to a single family home. However, in addition to amending the future land use, you will also need  to rezone the site, two separate processes. It's a bit of work but well worth the investment as it adds value to the site in the future.

 I agree there's a free market solution, however the problem is that zoning and master planning is controlled by politicians.