All Forum Posts by: William Silva

My first duplex was a turnkey, off market property. It was nice because it had a new roof and some newer updates. I didn't have to do anything to it. And one side was already leased. I bought that one in Alabama since I already owned SFR's there.

If you are looking for cash flow, I would look at a 4-plex. A duplex is okay, but I am not seeing the cash flow that I wanted. I would recommend you look for a good neighborhood to buy a multi family in. A lot of multi family can be located in not so good areas. Although it may look good on paper, the tenant quality might not be great. And that can cost you time and money. Try to find something that is surrounded by residential homes if you can. That way you are not competing with 30 other owners for rent.

@William Silva

Saving up for down payment and 6 months' reserves for each property I own became onerous. DTI also become an issue. DSCR avoids both of those. Interest rates are not the driver for me.

 I'm sensing sarcasm, so here is a study that supports my points, specific for the Tampa area. It was published last year in the Journal of Environmental Economics and Management: https://www.sciencedirect.com/science/article/abs/pii/S00950...  Researchers analyzed years of property data in Florida and found that after a hurricane hits, home prices rise and wealthier buyers move in. 

“Basically, the hurricane destroys part of the housing stock,” said Yanjun Liao, an economist... “And so there is less housing supply on the market, which ups the price.”

"The population turnover typical after storms can cause a “gentrifying effect”" Liao said. "In the long run, rebuilding efforts boost both home values and rent costs, which can prompt “changes in sort of the social fabric of the community.”"

Of course this is a broad trend and not an absolute rule. Some places may be condemned and lose value due to being unable to rebuild. Whole historic neighborhoods may be wiped out and lose the charm and character that made them attractive before. Certain areas may be rezoned, flood zones redrawn etc. and property values can go up or down depending on if the changes are favorable or not so the effect on pricing can be hyper-local. The OP asked specifically about functional homes not in the flood zone and historical data shows that this type of property usually goes up in value after a hurricane. 

Perhaps unprecedented back to back hurricanes will mean that all bets are off and the demand metrics will change moving forward... But generally speaking based on historical data, after hurricanes the overall supply is reduced while demand is increased, which creates higher pricing. 

@William Silva Hey William! I'd highly recommend an investor friendly agent if you plan to look outside of the areas you are most familiar with (assuming Miami). 

As for if its "too late" it all depends on what type of return you're looking for! I would say it's never too late, but I'll be honest that it is becoming harder and harder to find LTR's around the Melbourne area that are cash flow positive after insurance, taxes, today's interest rates, and current prices. 

If your satisfied with breaking even +/- a couple hundred dollars I think we can certainly find you something in this area but of course your cash flow numbers depend highly on your loan type, interest rate, and percent down. 

Happy to help you run some numbers if you're curious! Let me know man and stay safe with this incoming hurricane.

Not at all I'm an open book! This was late 2021, purchase price was 270k, and put 20% down. PITI was $1440, it is now $1600. For rent we charged $2400 and have kept it the same so that we can keep the same renters over the last 3 years.

Cash flow has been really nice but we do have some maintenance/CapEx expenses like all homes have: thus far $5000 for a new condenser, $1000 for a new fridge, and $2000 for pest control.

The mortgage interest rates were very low then, so deals might not cash flow this well in the current environment, but I’m sure there are still some deals that are worth the squeeze.