All Forum Posts by: Yolanda Salas

@Hamza Ali Amzil  

@Geordy Rostad is referring to 2 to 4 unit property. Or better known in our area as duplexes and quadplexes.    Good luck with your education part good to understand how to analyze a property.  One reason I like duplexes is because you can generally make more gross income than on a single family home for the same square footage, but you will have 2 of everything that needs to be maintained, so really look at your income versus costs.   

Do save your money so you can be ready to pounce on a property.  One option to consider if you find a multi unit property, if it’s your first purchase you could live in one side and rent the other.  An easy way to get started; have someone else pay your mortgage to build equity faster,  and then if you move or ready for your next property you now have two rental ready units.  

@Lorraine Patterson obviously it's up to you whether for long haul or not, but STR means having a reliable local crew to clean check up on the property and maintain as needed. Lagoon Oaks Circle is in a subdivision north of the grand lagoon and is primarily long term residents. If you want long term rental income that would be a good choice. Vacation rentals here need to be walking distance to the beach. This place is not. I would highly recommend looking at areas south of Panama City Beach pkwy on the west side or south of Thomas Dr and or front beach rd on the east side if you're set on a single family home. The best earning vacation rentals at a reasonable purchase price are condos.

@Crystal Ball you may want to chime In here

@Lorraine Patterson In Panama City Beach, there are some neighborhoods by virtue of their location, HOA, or local ordinance that are prohibited from being represented as a STR/Vacation rental. The short answer is it depends on where the house is. In unincorporated Bay County, a home on the east end or west end that is not under the city of Panama City Beach jurisdiction, will have different rules than those in the city. As far as permitting, not generally required but you must file bed taxes monthly or quarterly with the county and state, so its wise to use a property manager that can handle this all, in my opinion, when you're out of state. Have your realtor check on this. If the home already has a vacation rental history, then you might be good to go, UNLESS the city has an ordinance against it. There have been some recent ordinance changes in some of the popular neighborhoods.

I have been speaking to local lenders for you Michael since you messaged me, no one so far will do cash out refi better than 25% for investment properties, and most of my trusted lenders holding portfolio loans are at 30-35%.  

I am a local investor and real estate broker in Panama City Beach - happy to have a real conversation with you about the local area, no sales pitch I promise.  I care that buyers make good decisions fully aware of the area and the property.  You can message me if you like.  @Tyler Hardy  Think also in terms of cost per door, and cash on cash return per door.  If it's been sitting a long time, especially in this market that is booming and needing housing, there are reasons.  Have you been to this area since Hurricane Michael?

Since 2012 ...  market is up locally 

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $125,000
Cash invested: $25,000

Duplex 2/2 each side - walking distance to the beach. Could raise the rent much higher after hurricane Micheal but tenants have been great and in place 2+ years.

What made you interested in investing in this type of deal?

I learned that duplexes offered better cash flow and have begun to move more in that direction. This was a foreclosure and bank was ready for a cash buyer that could close quickly.

How did you find this deal and how did you negotiate it?

MLS

How did you finance this deal?

Cash deal

How did you add value to the deal?

Cleaned up and painted the units inside, changed out the flooring and carpet, new standard white appliances.

What was the outcome?

Still earning great cash flow. Appreciation fantastic, estimated current value at $289000

Lessons learned? Challenges?

Duplexes are great investments and I wish I had started there. Better cash flow and simpler maintenance for the earnings.

Investment Info:

Single-family residence buy & hold investment in Panama City.

Purchase price: $84,000
Cash invested: $50,000
Sale price: $180,000

Foreclosed property, initial repairs of $10000 to replace polybutylene plumbing pipes and change flooring in main living areas and kitchen. Additional repairs of $40000 to replace kitchen cabinets, new appliances, and bathroom cabinets, plus carpeting in bedrooms and screen in the back porch to get property ready for sale.

What made you interested in investing in this type of deal?

St Andrews is a cool community in Panama City. This was a few blocks from the main walking street of shops and restaurants. House was a 3/2 that kept going on and off the market... inspection revealed the problem so we took the challenge.

How did you find this deal and how did you negotiate it?

MLS, Fannie Mae was ready to negotiate a decent price once the plumbing issue was presented, as they prevented homebuyers from getting insurance. The property could only be a cash purchase.

How did you finance this deal?

Cash using self directed IRA funds

How did you add value to the deal?

First thing was changing out all the plumbing so property could be insurable. Once completed, new flooring and then paint. Rental income was $950 a month initially and increased to $1200. At point we decided to sell during tenant turnover, remodeled kitchen, baths, fresh carpet and paint, new hot water. Front landscape improvements.

What was the outcome?

Great cash flow - all funds went back into the IRA. Upon sale, was able to hold the mortgage thru the IRA.

Lessons learned? Challenges?

Interest received on holding the mortgage through the IRA is way better than the rental income to the IRA!

Investment Info:

Single-family residence buy & hold investment in Panama City Beach.

Purchase price: $130,000
Cash invested: $60,000
Sale price: $249,000

3/2 DSF in established beach & golf-cart friendly neighborhood.

What made you interested in investing in this type of deal?

Added property to my portfolio plan after the RE market crash to create income cash flow.

How did you find this deal and how did you negotiate it?

Realtor

How did you finance this deal?

Conventional financing 20% down

How did you add value to the deal?

This home came with a lease contract that expired a few months after closing, with rent at $1200 a month. After the tenant vacated, additional minor repairs to get the home ready for rent, included paint, landscape. Later improvements during tenant turnover, new living room flooring and new roof. When decision was made to sell the property and tenants were out, remodeled kitchen cabinets, added granite, and new bath vanities, improved exterior siding.

What was the outcome?

Good cash flow during the hold period and decent cash on cash return overall.

Investment Info:

Single-family residence buy & hold investment in Panama City Beach.

Purchase price: $114,000
Cash invested: $40,000
Sale price: $189,900

Small 2/1 single family home purchased for LTR. It was a pre-foreclosure just after the market crash. Near the beach. Began rent at $850 and increased it to $1200 a month by the end of the ownership period. Repairs included flooring, paint, roof, AC, kitchen cabinets and appliances.

What made you interested in investing in this type of deal?

After the RE market crash, I was ready to buy and hold for rental income - goal was to begin a rental income portfolio. I was still working in my corporate job and was able to use leverage.

How did you find this deal and how did you negotiate it?

Realtor

How did you finance this deal?

Conventional bank financing 20% down

How did you add value to the deal?

Initial investment to get it ready to rent - paint interior and exterior, replace carpet, replace appliances. Used realtor to final tenants and manage the lease at first.

What was the outcome?

Consistent tenants except first 2 tenants were horrible. I ended up taking on the property management myself after second fiasco tenant and haven't looked back since. We upgraded the kitchen cabinets, sodded the yard, added a sprinkler system on the well and raised the rent by $200, from then on the renters were quality renters that paid and we were able to steadily increase the rental income.

Lessons learned? Challenges?

Tenant screening is a must and never bypass your established processes and standards. I sodded the lawn and had the lawn serviced by a company which is incorporated in the rental price. For single family homes in decent neighborhoods this is a MUST. I did not do this at first with this property so the home was not taken care of and became an eyesore in the neighborhood very quickly. With this house being to cute and close to the beach, I needed to be a good neighbor and consistent with area.