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Real Estate Care to share? your #'s that is.......

Discussion in 'Real Estate Investing' started by EasyMoney_in_NC, Dec 7, 2007.

  1. EasyMoney_in_NC
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    EasyMoney_in_NC Contributor

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    So I often wondered (especially after some of the threads I was a part of on the RD board), what values are in other areas and how my area stacks up.
    What I'd like to know (and please only those that are actually in it...for accuracy), is what does an average rental home A) cost B)what size and features (# of beds/bath/garage) C) age/condition D) rents for and would it cash flow at those values.

    For instance in my area, the average rental house is: 1200 +/- sqft. 3 bed, 2 full baths and a garage. Average age is within 10 years old +/- . Prices these days for this house run $160K to $185K and rent these days run from $950-1100 and take from 1-3 months to rent (I can only guess on that one, mine rent usually within 30 days or less).
    Larger homes here tend to take longer to rent than that small box. Everyone and their uncle is a Landlord around here, so I have to really be on my sales game and make sure I make the most of every contact with prospective renters.

    I'd love to know how others have it around the country. I think this group is a bit more mature and not over run with newbies as apposed to the RD forum (I would never ask this there) and I look forward to the regulars chiming in on what they experience. I'd like to hear from those with rentals or that manage. I'd like to keep speculative talk out, I really want accurate pictures of the country, not what someone thinks is happening.

    TIA
     
  2. phlgirl
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    phlgirl Bronze Contributor Read Millionaire Fastlane

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    We buy single family homes in Jacksonville, FL. Typical scenario looks something like this:
    • 3/1 - 4/2
    • concrete block
    • 900-1400 sq ft
    • 10,000 sqft lot size (avg)
    • Purchase price 45k - 75k (50-70 cents on $1)
    • Rehab price 5k-15k
    • Appraised Value 100k - 140k
    • Rents $750 - $900
    Solid working class neighborhoods on the north, west and south sides of JAX. They fill up pretty quick. I think our longest wait to rent has been 1.5 months but most are occupied in two weeks time. The tenants do not have the best credit, in most cases anyway, but if you set the expectations/rules clearly from the get-go, it tpically works out. I would buy a thousand of 'em, if I could......
     
  3. EasyMoney_in_NC
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    EasyMoney_in_NC Contributor

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    wow, not to bad. do you pull money out on refi to fund others? are there that many available that allows you a choice of what to pick from? Our market is pretty much tapped for that type of deal and has been for years. Now you buy junk at slightly reduced retail, dump money in and wait for the value to catch up to your investment (I don't partake in this, I built all mine from scratch). Would love to find a house worth having for that little $$. I hear Florida is a VERY hard market these days.......any comments one way or the other?
     
  4. phlgirl
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    phlgirl Bronze Contributor Read Millionaire Fastlane

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    Yes, parts of FL are a mess right now but FL is a really big place. :) Like many other markets, Jacksonville experienced a significant price surge and there are now more homes for sale then there are buyers. This is across the board, in all price ranges. It is a very tough time, if you are trying to sell something.

    We left PHL about 1.5 years ago now, due to the same type of experience you speak of, with regard to your market. I started investing in RE, according to RD rules with the #1 rule being positive cash flow. Unfortunately, when we hit our target RE income, which allowed us to exit the rat race, the cash flowing properties in Philly had dissapeared. We had to find a new market. So, after months and months of research and seveal trips south, we decided that JAX showed the most promise. It is one of the last affordable coastal towns and it is growing at a rate of 75 people per day (according to census). There are several large companies moving into the area (a lot of focus on international shipping) and they are expanding the infrastructure to accomodate the growth.

    With a little research, you can find properties that cash flow here. As our relationships with REO realtors and banks get stronger (and the foreclosures keep coming) , the deals get even better. We pass on deals weekly and cherry pick the best ones for ourselves. We have acquired 40 properties since we got here and, had our capital base been more, it could have easily been 100+. In fact, we work very closely with another REI company who has a portfolio over 100, in that amount of time.

    We buy the houses cash and then perform a cash out refi, such that none of our money is left in the deal. In fact, we almost always take out 5-10k more than we put in.

    Plan, for now, is to hold longer term (5-10 yrs). By that time, the property cycle should have swung back around and, if projections are accurate, Jacksonville will be well on it's way to being a more substantial city.
     
  5. yveskleinsky
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    yveskleinsky Bronze Contributor Speedway Pass

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    What kind of interest rates are you getting for a refi? ...Interesting approach. I am assuming you are buying cash for quicker, cheaper closings and more incentive to sellers?

    As far as rentals in my area:


    5-10 year old homes: 3/2/2, around 1900 sq. ft., $190k-$245k, rents: approx. $1100-$1350/month. Rental time: varies when planes are rotated out. (Near AF base). Approx. 3 months when planes are slow in switching out.

    Newer homes (1-5 years): 4/2/2, around 1900 sq.ft., $230k-$260k, rents: approx. $1400-$1900/month. Rental time varies with planes as well. Same timeframe for rental.
     
  6. phlgirl
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    phlgirl Bronze Contributor Read Millionaire Fastlane

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    Yes, exactly. The cash closing, in 5-7 days if necessary, really helps in convincing banks/sellers that you are serious and ready to act. This also improves our chances of having a seller accept a deeper discount.

    All of our mortgages/HELOCS are fixed for 25 or 30 year terms and range from 7-8%. The products have definaetely become more difficult to find, as of late (particularly for us stated folks), but we still have a few banks working with us and are always keeping our eyes/ears open for more.
     
  7. santiago
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    santiago Contributor

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    I have a few homes in the northern suburbs of Atlanta that fall into the following category

    3 bedroom/2bath
    150-160k
    rent for 1200-1300 a month
    I usually find a tenant within a month, usually a starter family that got into a credit crunch and are looking to rent till they fix their credit. Most of the time they don't fix the credit and stay with me for 4-5 years..

    Phlgirl- thanks for sharing on your Jax market - I always thought that would be a great place to operate in..
     
  8. EasyMoney_in_NC
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    EasyMoney_in_NC Contributor

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    Well bravo for you :thumbsup:Way to go. Wish I had product here to do that with. This area is SOOO cash rich, that everyone's chasing the same duck. I used to build my rentals, but the lot values have gotten way out of hand and I can't do what I've done...anymore. Right now, there's the same amount of money to be made by selling the lot (if you got in right) as there is in building and selling a completed house (size dependent but as it pertains to cookie cutter rental houses). I'm surprised you have as many deals to choose from as you do. There aren't any here.......hasn't been in quite some time. Market values shot up in a heart beat from $100/foot to $135-$150/ft but rents hadn't really followed. Only now are there the average rental home breaking $1000/month. There's so many to choose from (it never ceases to amaze me how lucky we get in renting ours) that the market stay saturated and we all go nowhere price wise. Luckily mine all CF very well even with 80% LTV initial loans. I've been saying for years to my wife, that if I had come into this area in recent years, there'd be NO WAY I'd be in the rental market here. To many idiot owners, to many idiot RE rental agents, and crappy L/T laws. We have just always been so amazingly fortunate in our business, its been worth staying with and I got in "right" so......

    May need to take a closer look the next time I pass thru Jax :) Looking for investor partners? :D Licensed GC here!!
     
  9. Bilgefisher
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    Bilgefisher Bronze Contributor Read Millionaire Fastlane

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    Slightly off topic, but when the Navy choose to decommission the JFK, how much did this affect your area? (kinda curious I was stationed in Kingsbay, Ga and was in Jacksonville about 3 times a week.)
     
  10. phlgirl
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    phlgirl Bronze Contributor Read Millionaire Fastlane

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    Thanks, Easy. It was a scary leap - especially with the relocation and everything - but, so far, it has been everything we hoped it would be. :) It was a now or never type of decision. We do not yet have a family so figured we could take the chance.

    I will PM you, as we do work with a few other experienced (but not local) investors.
     
  11. phlgirl
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    phlgirl Bronze Contributor Read Millionaire Fastlane

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    Heard a little bit about this but do not think we were directly impacted, as the Mayport Naval Station is located pretty far east (we invest north, south and west). As you can imagine, the closer you get to the ocean, the more expensive RE tends to get - which makes it more difficult, with regards to cash-flow.
     
  12. phlgirl
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    phlgirl Bronze Contributor Read Millionaire Fastlane

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    My apologies.... I think I may have hijacked this thread a bit.

    Anyone else have numbers they would like to share? I am personally hoping to hear from someone in south TX. I hear the deals are pretty good there these days?
     
  13. andviv
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    andviv Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    Right now I am looking at multis deals in Houston, not SFH's. Current deal on the works is at around $40K per unit, rents around $650-$700 a month. It'd be interesting to see how are the SFHs doing in the area, but I have no clue.

    phlgirl, your posts are very good.
     
  14. yveskleinsky
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    yveskleinsky Bronze Contributor Speedway Pass

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    My dad is part of a group that buys apartments in Houston. ...seems to be going really well. They look for class D apartments and gut 'em.
     

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