All Forum Posts by: Villy Ellinger

Welcome back! Destin/Fort Walton is still a great area for real estate. Sure, it's slowed down/ normalized from the crazy Covid-time market, but that's actually better if you're a buyer. There is some oversaturation in the vacation rental market still, but there's still good potential for profit, strong demand and lots of tax benefits. My vacation rental investments still do very well. Long-term rentals do well too, especially in the areas like FWB or Navarre close to military bases.

And if you're looking for a primary home, it's actually a very good time to get a pretty good deal from sellers, especially if you're ok with doing some post-purchase remodel or updates :-). Let me know if I can help in any way.

@Fabio Cattolico I would suggest you look into Panama City Beach, Florida. There are quite a few duplex-type homes there. Not all areas actually have those. PCB does. The market is currently experiencing a slow down in STR/ investment returns and prices have dropped. That might make it a good time to get in on duplexes. I've actually gone out there (I live and work near Destin, but sell in PCB too) to look at some for myself as investments. If you have house-hack and live in one part and rent out the other (ether as long-term or vacation rental) that will bet you better interest rates and possibly no cap gains tax if you sell it later as primary residence.

For whatever reason people seem to ignore the rule of "buy low and sell high" and keep chasing the "most popular area" to invest in. That happened in PCB in 2021-22. Now that its slower the same people are selling off and chasing the next best area. I'm thinking they might be going in reverse :-)

@Mitchell Atiles check out Pensacola or Panama City/Panama City Beach and consider townhomes rather than condos for long-term rentals. The reasons:

1) Townhomes can be financed like single-family homes (as opposed to many condos being non-warrantable and requiring portfolio/investor financing).

2) Townhomes offer similar lower maintenance as condos and many have shared community amenities like pools, etc. BUT without the very high condo HOAs. If there are any community memberships for townhomes they are usually much lower.

3) Both Pensacola and Panama City are areas with housing need. In both areas there was a boom and even over-supply of Airbnbs/STRs. As the market for STRs has cooled off there are many who are selling off their STR townhomes (so a good time to buy). But quite a few are also converting to long-term rentals. STR is still a good business in both areas, but your question was about long-term rentals.

4) Both areas have big military presence which provides constant demand for housing and a churn of new-comers.

Duplexes, fourplexes and other multi-plexes are also good options for LTRs in both areas. Those are the areas where I work (Emerald Coast of FL), so that is what I know. I'm sure there are other areas with similar options. Near Pensacola, Gulf Breeze is a great area too. 

If you have any questions feel free to PM me.

@Kandi Sterling I think this is a very relevant topic. I'm on the Emerald Coast of FL (Destin - Fort Walton Beach) and I have noticed that there have been several investor developments, where an investor buys a property that also has some extra land and then adds tiny homes on the extra land to use for additional STR housing. In areas that are very tourist-desirable, like coastal/beachfront resorts in FL tiny homes can provide an alternative to higher priced hotel rooms and attract a younger clientele that is not looking to book the large (sleeps-12-at-a-time) condos. I can't speak of other type locations, but here by the beach, a tiny home located close to the beach can be a very attractive rental. A place to sleep, shower and shelter a bit, while not doing all the outdoor stuff that are the main attraction anyway.

I particularly see the appeal if tiny homes can be added to the land of an existing property. Obviously, there are permits and paperwork, etc. But if you have the land already... well, might be worth it. As a realtor I have seen a number of properties, especially in the PCB area, that come with larger lots that are zoned for more that one building. Definitely following this discussion.

@Matthew Irish-Jones I agree with you 100%. I mean I cash-flow on my investments, but I'm totally aware that's because I manage them and that is my job. I also BRRRR and that is also my job. I'm a real estate professional and sell real estate too. So when I get clients that tell me that they want to have passive income but also want to buy an STR that cash-flows right away or to BRRR while not doing anything themselves, I just pour myself a drink, lol. So, Amen, brother :-)!

 The increase in home prices on the Panhandle has also affected the price of residential land. So if you are looking the build a beach house, any beachfront or beach-adjacent land parcel will be very expensive as well. Prices have leveled off some this year. At least we're not seeing steep increases like a couple of years ago and in some areas (PCB and 30A) there are even some price decreases. No drastic pricing drop though.

 I will do my best to answer your questions. Might be easier on a brief phone call. PM me and we can set up a time for a quick call.

 You're definitely asking the right questions. While no one can predict interest rates with complete certainly, they have already come down from the highs 7-8 months ago. So a re-fi situation will definitely be a good option in the not so far future. I, personally, have a owner-financing loan on a property I recently bought that I plan to refinancing once the rates are lower and to get better cashflow just on that.

You mentioned that you are considering Destin West. Great complex. I used to own Heron 505 (3 bedroom unit on the Bayside). Sold it a couple years ago. The person who bought it used VA financing. I know that Sandpiper and Pelican at Destin West might be harder to do with VA because of how their covenants were structured by the initial builder. Heron and Osprey should be ok for VA. I'm not 100 % sure about Gulfside.

Pluses for Destin West: great amenities, very popular with guests, spacious and updated units, good rental potential.

Some minuses: HOA is pretty high, beach access can be an issue for some guests. Beach facing units and complexes tend to get higher rent, even though the amenities at Destin West are superior. The Bayside units are very nice, but the ones at Gulfside, which is older, can be pretty dated and have odd layouts. Also, with the new beach regulations in Okaloosa County, the beach section where the beach service for Destin West can be set up has been narrowed significantly and the Island Hotel amenities and beach area are no longer available to Destin West guests to use. That makes the beach area tight for the many guests that Destin West can hold as an overall complex.

If you have any further questions, feel free to message me if I can help. There are a number of other complexes on the Island that are also VA approved.

@Carlos Lopes pretty good plan actually, as long as you are able to use your VA financing. So, yes, you have to make sure that whatever you buy is VA-approved. I'm very partial to Okaloosa Island. My four personal investment STRs are located there. I like that access to the beach is a lot easier than in Destin, Miramar and 30A. Also the location is much closer and more convenient for access to Eglin and Hurlburt. I've actually had a number of military servicemen on TDY here stay at my smaller condos for several months in the off-season. That's another thing you may want to consider as you turn your property into an STR later. Okaloosa Island gets more than just tourist renters.

The northside of Okaloosa Island, starting from Bluefish and going west, does not allow for STRs per the current ordinance. The section east of that does. All of the south side allows it as well. There are not many townhouses on Okaloosa Island that allow STRs, but there are some. I actually own one. No HOA and easier financing than condos. My other three properties are condos, two small ones and one large. If you are looking at condos, those can be a good option too even with the HOA, because of the lower maintenance and with the added amenities like pools, lazy rivers, etc. Those type of things drive rental revenue and attract more guests. The key with condo complexes is to do due diligence on each individual complex as far at whether they are warrantable, VA-approved, and whether they might be facing any upcoming special assessments or have issues with the state-mandated structural integrity studies and their reserves. Special assessment can be a huge financial drain if they come up unforeseen.

You can also consider single family homes or townhouses in town in FWB or Navarre. Those are usually ok for VA financing. Many people are very successful in turning them into STRs. The main issue I see there is the higher maintenance costs, especially if you are no longer local when you turn the property into an STR. Even if you get a full time property manager they will not be able to deal with a roof repair situation or any storm damage without your direct involvement. Just some examples of things that come up with owning a home :-). Also, revenue potential is lower further from the beach.
With a condo a lot of building issues are handled by the HOA, but there can also be more restrictions.

Lot's of option :-).

@David John Forliti I'm on the Panhandle of Florida - I live here, own investments here (STRs that I manage through my own company) and sell real estate here. I like it here, in other words :-). My suggestion would be that you find the time to personally visit and learn about any of the investment areas that you are considering. Very often investors think they can do well by strictly focusing on the numbers. I'm a numbers person, but I'm sorry to tell you that approach rarely works :-). You need to like, or at least understand, the market where you invest. If you are considering the Emerald coast (Pensacola to Panama City Beach) and have any questions, I'll be glad to answer as best as I can. Any other areas - same suggestion that you do due diligence in more than numbers or online opinions. Good luck!