All Forum Posts by: Tchaka Owen

It's just a business. If anything, probably highly regulated and will likely have a consistent client base so risk of default should be low. Not sure about the insurance aspect. Not sure why it would be any different than any other retail.

Quote from @Ralph Ace:

Many homes that I show. I get a message from listing agent saying to submit best and final by certain time.

My question is that in deed true or just a pressure to buy tactic?

The last few years it wasn't uncommon to get a request for "best and final", however that's not the case in my area anymore. It's such a hot sellers market that buyers are going way over each other to win and that sellers are selecting from offers received. Basically, the offer you make better be the best because there won't be a round two.
 

Quote from @Adam Walter:

Using your rent which I'm assuming is market rent, I have a NOI of $12,235 for a CAP Rate of 5.19% Cash flow is $2394 for a 3.36% Cash on cash return

Your cashflow seems to be too high. 

Several suggestions:

1. Change Property Mgmt to 10%. If you every find a place charging less than 8%, avoid it. Also, at 10% you're looking at $2520, not $3820.

2. 5% is the absolute minimum for Maintenance. Unless it's in great shape and you don't anticipate anything, adjust to at least 7%

3. This chart is missing Capital Expenditures. CapEx should be similar to Maintenance; put that at 7% as well.

My figures result in $1560.1 of positive cashflow (Operating Income). That comes to $65/door. Are you happy with that? The general BP rule is no less than $100/door and some won't go below $150/door.   

Emerson Heights isn't the issue (it's neither spectacular nor bad). Here's the problem:

Purchase Price: $115K, Rehab Estimate from Contractor: $60K, ARV: $210K, Rent: $1200

At what point in your research leading up to purchase did these numbers make sense? @Aaron Signer suggested you'll walk away with $10k on a flip; that's IF your numbers are correct. One slip and you're making ZERO. Renting at $1200 after you've put in $175k? And that's not including closing costs. Terrible numbers.

You're not in SF so you need to get your numbers out of your head (I have a number of friends in the area and am aware of your numbers) and remember that this is the Midwest.....totally different set of numbers. Cashflow is a given. If you're not getting cashflow, go to the next. Indy has been one of the hottest markets for OOS investors, many from CA and many of you are being taken to the cleaners. Deals in Indy do exist, but be patient and walk if the numbers don't work. Because there will be another deal before long.

Quote from @Krystn Hill:

Hi Jared - are you still flipping properties in Brevard County??  I just saw your story on how you flipped the condo beachside in google.  I live in Merritt Island, and am a newbie with Bigger Pockets.  Wondered if you could recommend a contractor?  

Hi Krystn,
I've been slowly collecting names of people for different jobs. I don't have a contractor, but my list does have a few people. What job(s) do you seek?

Quote from @Charles Fischer:

Quote from @Tchaka Owen:

Quote from @Charles Fischer:

Alyssa:
I have had experience in Cape Canaveral with STRs. While they are legal (with inspection and proper permits) they are restricted to weekly. They have hired a third party to monitor and enforce this.  Watching to see how this pans out..

My understanding is that the week minimum is a state law as opposed to Cape Canaveral. Not verified.

 Here is a link to the most recent ordinance passed by City Council : https://prochamps.com/PROCHAMP...

See page 5, section 5 line 21. references city enacted minimum rental period 7 consecutive days...

Ah, thank you for the clarification!! Read the first part and it makes sense. It's actually the other way around and CCanaveral had it in place prior to state legislation, thus grandfathered.

Quote from @Karla Simmons:

I keep hearing that homeowners insurance is high in Florida because of hurricanes, which makes sense. I am assuming it is not high state-wide, but in the areas that have history of hurricane damage to homes. Is this true? Would somewhere inland such as Orlando or Gainesville have less expensive insurance? And can someone quantify what high insurance cost is? An example possibly? Such as a $300,000 home has annual or monthly premium of $X amount.

Thank you!

Several factors:
1. Florida is a high fraud state and lots of fake claims have been submitted over the years.
2. Florida is taking the blame for what's going on in other states.

The first is self-explanatory. Let's look at the second one....in recent years, how many hurricanes have hit Florida compared to other places? After Wilma in 2005, South Florida did not have a cane until Irma in 2017. So that's 1 cane over the past 16+ years. Other parts have been hit, but overall there hasn't been much action in well over a decade. Meanwhile the gulf coast (MI, LA, TX) have been hit, the Outer Banks are getting beat up regularly. Who is paying for that damage? No doubt FL is helping. The excuse has always been that we're refilling the coffers. That made sense at first, but it's been years of filling. 

Quote from @Charles Fischer:

Alyssa:
I have had experience in Cape Canaveral with STRs. While they are legal (with inspection and proper permits) they are restricted to weekly. They have hired a third party to monitor and enforce this.  Watching to see how this pans out..

My understanding is that the week minimum is a state law as opposed to Cape Canaveral. Not verified.

Hi Alyssa,

It's a bit tricky here - while the area seems perfect for STRs, many towns are not in favor. For example, Merritt Island does not allow them. Cape Canaveral (to my understanding) also doesn't, however they're not strictly enforcing it. Not sure about Cocoa Beach. Unincorporated Satellite allows them, Satellite "proper" does not. If you look at AirB&B, you'll find rentals throughout the area, just know that it's not all legal.