All Forum Posts by: William Silva

@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.

Had to respond to that great first sentence!  

1. Mine have all been in the Space Coast (Melbourne, Rockledge, Melbourne Beach and Indialantic)

2. I first bought while stationed with the Air Force in England.  I contacted a title agent, and used her expertise to find an investor friendly agent, a lender who could close, insurance etc. From there, we moved to FL and I found several houses by driving around or riding my bike in the neighborhood.

3. All over the place and over a span of time. My houses are in my bio. Last one was a big STR that I bought, refinancing houses I'd held for some time to get the down payment. I have bought several with owner financing at 6% interest only. $400k and $500k on the purchases…and rented them on AirBnb.

4. I used DSCR financing, and have used the last 3 purchases as STRs.

 Not actively looking for properties at the moment, this was in 2021 and we were just trying to buy up as many properties as we could while the rates were low. 

Since we had that opportunity and wanted to diversify a little outside of Denver we looked for areas that had affordable homes with good median rents. A fair amount of locations that met this criteria were in florida. From there we decided on Melbourne because of job security with the space coast. It was not a driving factor but was a deciding factor to be close to the space coast. 

@William Silva

After deciding to invest out of state, I actually settled on your home state of FL. Got a SFR in the FL space coast (Melbourne) that I am LTRing. Super cheap houses compared to Denver where I'm at, and good rents. Aside from a rat problem its been pretty smooth 😂

I could not imagine STRing out of state. My local STRs require me to be VERY involved. So to make STR work out of state for me that would require a property manager. To me that expense would negate the increased profits of STR, which is the whole point of STR.

I would find a market with good median rents, and low home costs, and a location that has some indicators that would support future price growth (pop growth, job growth, large businesses/employers moving there). Florida tends to incentivize businesses (tax breaks) and individuals (no state income tax) to move there so it checked that box for me.