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Thread: Orlando Real Estate Market on Fire

  1. #1
    Senior Member Marc Middleton's Avatar
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    Default Orlando Real Estate Market on Fire

    I don't usually post rants or off-topic threads, but wanted to get this off my chest as I don't blog anywhere else.
    http://www.orlandosentinel.com/class...727-story.html

    When you see this article about how flips are hard to find and investors are pulling back, guess what? It's too late!

    2014-2015 I was pushing and pushing my investors and people looking for deals out of Miami and into Orlando. Tampa was already heating up and I know Orlando first hand. For whatever reason, people wanted Miami despite the low returns, high prices, high carrying costs, and crappy neighborhoods. People buying condos in South Beach for $200k for a 1 bedroom and renting it out for $1500/month, like that's a good deal? I convinced 1 investor to buy in Clearwater/Tampa area a newly renovated duplex for $80k and it brought in $1450/month and NO HOA fees! We sold it a year later for $115k to a 1st time home buyer who now lives rent free next door.
    I guess its not 'sexy' but Return on Investment (ROI) shouldn't matter right? Do you care the name of your mutual fund as long as its returning 5%-7%??

    I can't tell you all how many people I told to buy in Orlando. Look at the history. Miami booms first and busts first. Miami is always the barometer for the state. So in 2014 when the deals were done, foreclosures were few and far between, short sales were gone and a thousand articles written about Miami's real estate prices, wouldn't that lead you to believe that its time to look elsewhere?
    I remember one investor was under contract for a $86k 3bed condo that was rented long term for $1100/month. HOA were $350 and the return was only 9% so he said no. Now its $115k and rents for $1400/month.
    We were under contract for this one as well: "528 Sun Valley Village #207" - bid $51k and it sold for $53k on Dec 1st, 2014, would rent for $1000 at the time and it was only a 10% return, they said not to bid higher... Now it rents for $1200/month and its worth $85k...

    http://www.zillow.com/homedetails/75...45821510_zpid/
    The amazing property above sold for asking price, $1.1ML on Dec 10th. My investor wouldn't offer asking price on Dec 1st, said he 'never does' and we offered $900k. We were told there multiple offers and to come up. He said maybe another $50k...Now zillow has it worth $2.2ML...sure their valuations are wrong at times, but still... where can you find a property in the keys with its own peninsula for $1ML? I told him this would be a deal that he could be proud of for many years to come and a place to retire one day...

    I get there is a certain level of distrust when using someone who's pay is related to the sale of something. But we aren't talking about a home buyer you are working with for 6 months and they aren't buying something and they start to feel as if you'll sell them anything. (I would never do that and would rather just rent my client something than see them make a huge mistake).
    But when you are looking for an investment and hire someone to find you investments, wouldn't you listen to them? Otherwise, what are you doing? Just wasting people's time?


    Anyways, just wanted to rant in the 'off topic' section for a bit and now I feel better :-)
    Last edited by Marc Middleton; 08-02-2016 at 11:53 AM.
    Asunnysnowman likes this.

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    Senior Member FredTheCatTravels's Avatar
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    Default Re: Orlando Real Estate Market on Fire

    I have people walking in my office door every day on Las Olas looking for flips.

    They are usually from somewhere in the midwest and want a $60,000 house they can put $20,000 in and sell for $200,000.

    They don't believe me when I tell them they don't exist.

    IF you can find a $200K home in a neighborhood full of $300K homes, it will need $100K worth of work just to close.

    One of my clients and I got in three different Fannie Mae bidding wars.

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    Senior Member Marc Middleton's Avatar
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    Default Re: Orlando Real Estate Market on Fire

    Quote Originally Posted by FredTheCatTravels View Post

    One of my clients and I got in three different Fannie Mae bidding wars.
    yeah ,the foreclosures in S. Florida are the worst..."Oh its bank owned, its a good deal" nope, its usually market value or slightly above and it needs work. Better off finding a desperate seller (lots of them, especially from S. America) and are in better condition.

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    Senior Member Blackford Oakes's Avatar
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    Default Re: Orlando Real Estate Market on Fire

    Music to my ears !

    To start with, I'm not a Orlando dude, and I get the chides this city gets, especially from Miamians.

    I bought in Greater Orlando 14 years ago for pennies on the $. Two years later, my immediate area was recognized has the fastest growing area in the country. In my mind it was like having faith in Brasilia before the roads were even built. Because of growth, the road situation is finally catching up and you see less cows - LOL ! . As far as Orlando, I've seen it change through the years and it's a lot better. On more than one occasion I've mentioned here, Orlando is going to be the state's big dog. The majority of homes here are less than 15 years old and there is still plenty of land and license to develop as you like.

    I'm not top of the r.e. game. Just notice you have many baby boomers with viable pensions enjoying their sunset years. Many middle class people with all of a sudden a lifestyle they never had. Something not permissible in Miami for many.

    Question, Marc; Miami is known for it's fluctuation with what happens in Latin America. As you know, Orlando is the preference of Puerto Ricans. With the situation on that island; How much of that is contributing to the market ?

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    Senior Member Marc Middleton's Avatar
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    Default Re: Orlando Real Estate Market on Fire

    Quote Originally Posted by Blackford Oakes View Post
    Music to my ears !


    Question, Marc; Miami is known for it's fluctuation with what happens in Latin America. As you know, Orlando is the preference of Puerto Ricans. With the situation on that island; How much of that is contributing to the market ?
    The situation is definitely helping the rental market, especially in S Orlando and Kissimmee where I lived for a few years in each area (millenia Mall as well as 192 & Poinciana Blvd). Also, East Orlando off Semoran & Goldenrod is another hot bed of activity.

    But the bulk is people getting off their butts and buying affordable homes with interest rates still in the 3's. So that is preventing all the flips now. But previously, it was just savvy investors buying up properties, not people from the island of P.R. But the investors were definitively renting to those residents.

    It just makes logical sense to me and my point was to the investors, it didn't seem to make sense to them (at least not the ones that were contacting me). IF Miami has boomed, wouldn't Tampa & Orlando be next? Especially when that was the case just 10 years ago?

    Now the suburbs are booming as well, in like Cape Coral on the West Coast & Clermont in the middle...

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    Senior Member Blackford Oakes's Avatar
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    Default Re: Orlando Real Estate Market on Fire

    Rarely do I have an occasion to take Hwy 27. Did so last month on my way to Ocala. Clermont has been in play for some years now but I'm also impressed with Davenport. These are far from being sexy zip codes but great value. They also have easier access to 1-4 than I do. Driving through Davenport, you at least see eight middle class gated communities on each side of hwy that I wouldn't mind living in. In another market( maybe closer to a beach ) , these homes would fetch a handsome price.

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    Senior Member Marc Middleton's Avatar
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    Default Re: Orlando Real Estate Market on Fire

    Quote Originally Posted by Blackford Oakes View Post
    Driving through Davenport, you at least see eight middle class gated communities on each side of hwy that I wouldn't mind living in. In another market( maybe closer to a beach ) , these homes would fetch a handsome price.
    Glad you brought up Davenport. I'm telling people: You can get a $100k newly built (late 90s and on) 3-4 bedroom townhome in a community with full amenities in Davenport. And all of Davenport and Clermont is considered 'rural' and you can get 100% loan from the USDA through a qualified lender and sometimes even an extra 2% towards closing costs! So for $3k or so, you can buy a nice townhome close to Disney and away from the traffic. Perfect for new families or those that want to build equity, not waste money on rent, and do a lot of traveling but have a nice homebase to return to. Plus they rent out so easily to the British and other tourists who come to Disney. Sites like Homeaway.com you can get $1000/week in high season.

    Its less than an hour to Tampa so you can watch a football game, gamble, watch a good hockey team, concerts outdoor at the amphitheater, etc.

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    Editor Matt Meltzer's Avatar
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    Default Re: Orlando Real Estate Market on Fire

    Woudl you be able to conceivably MAKE money on one of those townhomes in Davenport just by renting it out?

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    Senior Member Marc Middleton's Avatar
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    Default Re: Orlando Real Estate Market on Fire

    Quote Originally Posted by Matt Meltzer View Post
    Woudl you be able to conceivably MAKE money on one of those townhomes in Davenport just by renting it out?
    IF you annualized the returns, then yes. Some months may break even or lose money, but thats when you or your family could use it. Some months will make a lot of money.

    If you did $750 week (about $100/night for a 3 bedroom), if you rented it two weeks per month, you could make $300-$400/month after mortgage payment, taxes, and HOA fees. Charge the tenant for cleaning as well so you don't incur that cost. (all Homeaway.com guests know there is a cleaning fee).

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    Default Re: Orlando Real Estate Market on Fire

    Quote Originally Posted by Marc Middleton View Post
    IF you annualized the returns, then yes. Some months may break even or lose money, but thats when you or your family could use it. Some months will make a lot of money.

    If you did $750 week (about $100/night for a 3 bedroom), if you rented it two weeks per month, you could make $300-$400/month after mortgage payment, taxes, and HOA fees. Charge the tenant for cleaning as well so you don't incur that cost. (all Homeaway.com guests know there is a cleaning fee).

    I know I'm late to the game but I wanted to send out a thanks for this post.
    I'm from Austin, so I'm used to ridiculous real estate but I thought South Beach was a bit extreme, however it is still incredibly similar to our downtown's prices so, again, not totally sure just how ridiculous it was.

    Unfortunately, it seems to meet almost all of our needs. High walk scores, high bike scores, close beach, pool, pets. The only thing it's a little much on is dollars/sq ft.

    We're leaning towards renting at this point just in hopes that prices will go down before we pull the trigger and buy.

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    Senior Member Marc Middleton's Avatar
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    Default Re: Orlando Real Estate Market on Fire

    Quote Originally Posted by Asunnysnowman View Post

    We're leaning towards renting at this point just in hopes that prices will go down before we pull the trigger and buy.
    I've seen some good deals lately so I'm thinking the Brazil & Venezuelan owners are eager to sell. Canadians, New Yorkers, etc. seem happy with their investments and don't plan on selling unless for personal/financials reasons.

    The best deals are on the $400k-$1ML condos in Sobe/Mid Beach. But I've seen a couple of $200k-$250k deals come and go recently so its definitely possible.

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    Default Re: Orlando Real Estate Market on Fire

    Good to hear, thanks. We were looking at the cheapie 180k condos and such. We're hesitant knowing the city might soon be under water.

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    Senior Member Marc Middleton's Avatar
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    Default Re: Orlando Real Estate Market on Fire

    Quote Originally Posted by Asunnysnowman View Post
    Good to hear, thanks. We were looking at the cheapie 180k condos and such. We're hesitant knowing the city might soon be under water.
    Lol, soon? If the state did nothing, it would be 20-30 years.

    $180k in Sobe would get you a studio or maybe a small 1 bedroom some place. There was a good deal on a 1/1 with parking on Michigan for $199k that I was sending to my clients, but those are few and far between.

    You'll need 15%-20% down as well to buy a condo in Florida unless its a Fannie Mae Approved building (which would require less than 50% renters, 10% of the HOA goes to reserves, no pending litigation, no large retail space, etc.)

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    Default Re: Orlando Real Estate Market on Fire

    Quote Originally Posted by Marc Middleton View Post
    Lol, soon? If the state did nothing, it would be 20-30 years.

    $180k in Sobe would get you a studio or maybe a small 1 bedroom some place. There was a good deal on a 1/1 with parking on Michigan for $199k that I was sending to my clients, but those are few and far between.

    You'll need 15%-20% down as well to buy a condo in Florida unless its a Fannie Mae Approved building (which would require less than 50% renters, 10% of the HOA goes to reserves, no pending litigation, no large retail space, etc.)
    Soon, yes, soon being prior to mortgage repayment (see other post we're chatting in).

    That's about what we're looking at. We're still discussing the priorities in what we're looking for. A pool is at the top, but we think Flamingo park might do (probably not if there are too many kids). Mostly if it allows a conventional loan & pets we're good to go. Anyway, we'll be there next weekend and are going to look at a few units - we're really favoring the Byron Ave area - there's 1 unit with a pool there that we'd like.

    We're good with that much down, we have some assets in Austin we'll be selling prior to the purchase. I think we've seen 1 FHA approved unit in our hunt lol

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