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About 18 months ago was when we determined that properties in Florida would be a great investment based on the status of the market.  Stability is getting clearer and rental rates in addition to our median home values have started increasing, one of the only areas of the country where this is transpiring.  We believe that 2011 will be the first year in the last 6 where rental rates show the typical 3% incremental increase across the boards.

Our process for real estate investors is simple and as follows:

• We acquire the assets direct from the banks or negotiate the short sale with the original seller.  Occasionally a short sale done the right way can get you the same deal a bulk purchase would.  What is becoming popular are Deed In Lieu of Foreclosures where we are assisting in the negotiations of those as well, just an additional way to give us access to inventory.
• Prior to our firm closing on the assets, we do a thorough inspection with our contractors, budgeting for any repairs needed to bring the property back to “rent-ready” condition.  Most of our properties purchased have a criteria of being built 2006 or newer.  Minimal rehab is needed, almost always cosmetic only.  In addition to appliances, paint, possible flooring, and fixtures, there is no structural work needed which keeps our rehab costs down.
• Once we budget for the rehab work, our contractors do the work at our expense.  At this point, the home would be made available to our real estate investor database.  The home would be sold to the investor entirely turnkey and by the time the investor closes, it is very likely that Property Management would already have tenants ready to move in with an annual lease at market rental rates.
• The way we factor our price to the investor is as follows:  Our Acquisition from Bank + Rehab Costs + 8% Acquisition Fee = Investor Price.
• Most of our prices for Single Family Homes range from $65,000 to $90,000 for entry level homes.  These provide a Capitalization Rate of about 10%
• Most of our 2 family homes (duplexes) range from $75,000 to $80,000.  These provide Capitalization Rates of about 13-14%.
• SW Florida Turn Key Management, Inc. is who we recommend for Property Management.  Their innovative online system makes it very simple and passive for even international landlords.  Management fees are 8% of Gross Rental Income and have impeccible performance that satisfy any tenants in any properties.  Their higher rental rates are achieved by requesting small improvements in the properties that make the appeal far greater.  This comes at an inexpensive cost but provides an invaluable suggestion.

Our focus today is Cash Flow.  We have maintained our position of reverting back to the “old-school” fundamentals of real estate investing.  Instead of putting your primary focus on Speculation, look more to the Cash Flow the property generates.  Additionally, positioning yourself in a housing market that has positive growth factors is important.  Avoid the warzones and look in areas with lowering unemployment, increasing values, stabilized rental rates, and decreasing inventory.  If you would like to see an example of one of our properties, CLICK HERE to see a duplex example and CLICK HERE for a Single Family Home example.

If you are interested in hearing more about what our firm provides, please feel free to contact Scott Allan @ (239) 278-0028 or e-mail us here.  You can find a lot of our inventory by browsing around our website, or you can contact us for what is available.  Also feel free to comment below.  We will answer any questions in the comments section as they are forwarded.

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Our concept is buying from the banks, rehabbing anything to bring it to rentability standards, and selling to investors who are looking for a positive cash flow investment opportunity.

Here is what numbers typically look like:

One of the properties we have acquired and rehabbed recently is located on Melanie Lane in Brandon, FL.

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The home used as an example is for sale beginning Friday November 19.  This 1967 concrete block built home has over 1,280 square feet of living space.  Boasting 4 bedrooms (massive master bedroom) and 1 full bathroom, other features include a separate laundry room, renovated kitchen and a large backyard with no neighbors on the backside for added privacy.

The home is located less than 10 minutes from the Brandon Shopping Center and only 20 minutes away from the University of South Florida and University of Tampa campuses.  Very close to major highways, creating a high demand for rent in the area.

Some highlights:

• Tenants sign 1 year lease
• 4 bedrooms / 1 Bathroom
• Beautiful updated kitchen
• Fresh new paint throughout
• Oversized backyard
• Concrete block construction built in 1967
• 12 Month Maintenance Free plan with all purchases.

Updated on 1/6/11

Current Off-Market offering is a Fractured Condominium Complex in TAMPA, FLORIDA.  Below are the details.  Call Scott @ (239) 278-0028 for additional details.

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126 Units out of 168 for sale

• New A/C’s in 85% of units and new appliances in 75% of all units.
• No Cap X is likely going to be required.
• Call for more details.

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UPDATE:  Orlando complex has been placed under contract.

Current Offering:  205 Unit Apartment Complex:  Jacksonville, FL.  Value Add complex and an opportunity for an investor to reposition the asset to increase revenues.  Current rental rates work well.  Current occupancy 72% located on the intercoastal of Jacksonville.  Almost half of the 205 units have direct water views.  Contact us for additional details.

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Due to the privacy request of this property, we cannot disclose a whole lot here.  This complex is not listed publicly.  We are working out the final details to make this property available to a real estate investor looking to purchase a huge Upside complex. Price is $3 million from the lender.

It is 340 total units.  Currently 15% Occupied due to nearly 3 years of neglect.  Capital Improvements are needed in the amount of approximately $2.5 million.  This budget was created with a contractor and would include a full cosmetic update. Great location.  On-site property management, 2 pools, kids play area.  Sits on 18.3 acres.  Original note in the amount of $17.3 million.

After Cap X, the total price per door would be about $16,000.  This is almost 35% less than competetive recent sales.  The current Net Operating Income nearly covers current expenses.  Most of the capital improvements can be paid by income.   Area is very dense and is supportive by numerous similar complexes very close to Mall of Millenia.  Area’s occupancy rate is 93%.

Limited Due Diligence is offered and lender is selling “As-Is”.  We have due diligence folder including receiver reports, comp map, and financials.  Contact Us for additional information.

International investors

More and more local Florida real estate agents have dealt with an increasing number of foreign national investors and that will likely continue into 2011.  I mentioned previously that changes in value to the US dollar have had a strong impact on the international real estate business.  If you follow trends, which most savvy investors do, many believe that purchasing a home in the US is more affordable than in their own country and holds more value and future potential.

The top international markets that are putting their money in the US real estate market is Canada, Mexico, the UK, and China/Hong Kong.  Canadian investors make up for 23% of the international buyers and have remained the leading investor country for the last 3 years in the US market.

On average, foreign buyers tend to purchase closer to the upper end of the market with 16% buying homes priced at more than $500,000. According to Realtors, this was because international buyers are typically looking for a second home.

Although International buyers have had reported purchase agreements in 39 states, a majority of the total buyers are concentrated in Florida, California, Arizona and Texas. These four states account for 53% of purchases and have remained the top destinations for the past three years with Florida leading the pack.  This is in part due to lower prices and higher effective rents.  Most are drawn to those factors in addition to convenience to the tropical settings and amenities.

The majority, 66%, bought single family detached homes. However, more international buyers purchased a condo than did their US counterparts, at 23% and 7%, respectively. And only 44% of international buyers used a mortgage to pay for their home, compared to 92 percent of domestic buyers.

Some 55% of foreign buyers paid in cash and this is often because of the difficulty in establishing international credit in the US.

We are seeing big plays in single family homes and residential multi-family homes.  Due to the record number of foreclosures over the past few years, most homeowners must transition to becoming a renter.  Rental property vacancy rates are at all time lows and Capitalization Rates are achieving numbers in the teens.  If you are an international investor and would like additional information on purchasing real estate in Florida, we have expertise in the bank owned properties and can send you financials to any opportunity that fit your criteria.

Florida is set to be one of the bargain hotspots of 2010 for real estate, according to a new report.  As the global recession eases and the recovery begins, experts are forecasting that investor confidence will flow back into the US real estate market. New home sales should post an increase of around 20% from the very low levels seen in 2009, according to the report.  It points out that few real estate markets have suffered more than Florida where oversupply has been a major factor in driving down prices.  Foreclosures and a glut of unsold condominiums have especially contributed to slowing down the Florida housing market.

Sean Snaith, economics professor and forecaster for the University of Central Florida in Orlando, agrees. ‘For international buyers, 2010 will be a great time to buy in Florida.  The imbalance of supply and demand puts the buyer in the driving seat.  Large inventory, pricing power and the continuing weakness of the dollar when compared to other currencies mean awesome deals in the housing sector,’ he said.

Although we have secrets on how to get bank owned homes at the same bulk discount price, I would doubt most that say they still get portfolios, aka, bank tapes.

According to a Fannie Mae representative when I asked when the next time I could get an opportunity on a 20-25 home package, his response was this:  “Why would we package homes and sell at 30-40% discounts from current market value when we can put them on the MLS and sell them for market value within 30 days?”

Hmmm..good point.  But that is what it is coming down to.  There is literally hyper-activity in Lee County with sales skyrocketing.  Since mid 2009, our median home price in the county has gone from $84,000 to over $100,000 today.  Show me another market in the country that went up 16% in almost one year.  Lee County is prime real estate right now and the window of opportunity will be gone in 12 months for those that want quick turnovers.  (That is my opinion, and I’m sticking to it!)

We acquire and sell dozens of homes per month and we have 2 programs for our real estate investors for Cape Coral and Lehigh Acres homes.

The first program is the FLIP concept.  That’s right.. Bet you never thought that phrase would be in the same sentence as “real estate” ever again.  I’ll give you a hint.  Have you seen the marginal difference in prices between cash based buyers and those that use FHA or USDA financing?  It’s over 20% difference.  Almost 40% difference in some areas.  You won’t find a GREAT deal if you are financing.  Won’t happen.  I am a seller and also a buyer.  As a seller, I am making way more money holding my property for 30-40 days longer selling to a buyer using financing.

Most realtors don’t know this.  Heck, most don’t know how to even look up lein / mortgage records.

The second program is the “End-User Investor Program”.  Get your pens ready and remember this.  This is known as your “buy and hold” strategy.  Put down your pen.  You didn’t need it.  It’s not science, just timing at this point.

We are one of the strongest in the local housing market at getting great deals for our clients.  We are a licensed real estate brokerage and investors ourselves.  We offer a turnkey solution to investing.  We purchase the homes with our money and do the rehab work with our money where we wholesale out.  It’s seemless and simple.  Contact us today if you are interested in being successful in Lee County Real Estate.

Some extra TidBits:

TRUTH:

• USDA and FHA do not have the same strict seasoning requirements as they used to.
• FHA appraisers require all mechanical systems to be working.  Be sure garage door is accessible.  They need to take a picture of it half-open.
• You can buy a house for $50k to $65k and sell it for $85k in 60 days.  We are doing it over and over again for our investors.  Proof upon request.
• Chinese Drywall is defective and kills your value.  Don’t touch it.  Some agents will convince investors to buy cheap and remediate the problem using a drywall company.  Try selling a house on the market where you have to disclose “House was treated for Chinese drywall”.. You have to disclose it and it will sit for sale FOREVER.

MYTHS:

• I should just call a retail agent and get a home listed in the $50k range.  Why should I use you?  Answer:  Banks recommend to their agents to set the price low to trigger a bidding war.  If you want to waste a lot of time, these are good to go after then.  On average, REO homes sell for much higher than what they are listed for.
• Short sales are not a way to go.  Our response:  Short sales are one of our favorites.  We assist in short sales with homeowners making an immediate cash offer and pairing them with a local real estate attorney.  Our process is quick and we get great prices.  Takes time, but more margins.
• I cannot finance an investment property.  Response:  Yes you can.  There are 75-80% LTV loans for investors with good credit and reasonable debt to income ratios.

We assist homeowners in getting immediate answers and solutions from the lender(s).  Our immediate actions quickly trigger the lender into negotiations that provide a far less confusing solution with far less repercussions to your personal financials and credit score.  Ourselves and our attorneys assist in this process WITH you, not necessarily FOR you, something we insist on to achieve comfort level with homeowners and the entire process.  While this process could be time consuming, we take the burden and stress off of you and work together with an attorney (of your choice or ours) to make sure all ends are covered.  Time constraints are far less in 2010 than they were in 2009, a good thing!

An “under-water” mortgage or delinquency can be stressful to you and/or your family.  Give us an opportunity to meet and discuss this seemless process.  There are no listing agreements involved, only quick solutions, favorable to your personal situations.  We have already achieved success with this program at a rate of over 90% in Florida and are now prepared to bring the success to NJ.

Why work with us regarding your Short Sale?

• Definition of SHORT SALE:  An agreed upon purchase price between homeowner and Lender less the amount of the current principal payoff amount.  Short sales have become the most EFFECTIVE and economical way to sell your home in today’s adjusted housing market.
• A short sale is far less damaging than a foreclosure.  Short sales could take as little as 1 year to rectify on your credit, where foreclosures can take as long as 7 years.
• If done correctly, a short sale allows you “Debt Forgiveness”. You may have heard of lenders issuing a 1099 of the difference between your sale amount and your actual payoff amount.  This is simple to take care of.  Primary Homeowners are protected by Debt Forgiveness today.
• Investor Property?  Ok, so you are not a primary homeowner.  You are subject to the 1099 from the bank.  The good thing about an “Investment Property”?  You have write-offs that primary borrowers do not have.  The 1099 could be tax deductable as a LOSS.
• We are licensed by the New Jersey and Florida Real Estate Commissions.  We know the laws and in combination with our legal experts, we make this a seemless process for you.
• We meet personally or have conference calls weekly on an individual basis to discuss progress or problems.

We offer this service in New Jersey and Florida only as those are the markets that we know better than anyone.  We cater more toward the entry level home prices.  Higher Priced homes will be in the near future.

Please contact Scott Allan at (877) 688-7582 for further details.

Over the last 4 weeks, we have looked at 3 complexes in Naples and Ft. Myers.  Two of the three are completely stabilized properties and cash flow very well, depending on the price you buy it at.  The coincidence is that 2 of these complexes are distressed sales.  Investors of this type of property most likely have other properties.  As some investors look to eliminate debt, they short sell or give up their other properties.  If the note on the complex we are looking at is close to loan maturity, we know we have a distressed property on our hands, because chances are, no matter what type of cash flow it throws you, the current owner will not be able to refinance the loan due to his other real estate in the crapper.

Since 1992, Mortgage Professionals, Inc, our in-house and preferred lender, has established long lasting reciprocal relationships with some of the largest lending institutions in the world.  Our expertise is offering construction financing and bridging it to your permanent loan.  Whether your intentions are to build a home, buy a pre-existing home, refinance, pull equity in the form of a HELOC, or any other real estate related loan, Mortgage Professionals, Inc is at the top of the industry with an exclusive portfolio of loan products.  Currently licensed to lend in Florida, North Carolina, Georgia, Virginia, Delaware, and Pennsylvania.

Mortgage Professionals, Inc predicates their business on construction financing.  If you are looking to purchase a home through construction, our Loan Officers would submit for an end-loan commitment based on your qualifying criteria.  Upon approval for the end loan (your typical 30 year amortized mortage), Mortgage Professionals, Inc would offer the construction funds based upon your upfront “end-loan” commitment and work directly with the builder to produce a time efficient product.  We work with credit challenged borrowers with FICO minimum of 620+.

Mortgage Professionals, Inc. offers construction to permanent loans for the following loan programs:  Maximum loan is $250,000

• USDA which stands for United States Department of Agriculture:  A USDA Home Loan is a guaranteed 100% Government insured purchase loan.  These loans are only offered in rural area’s and serviced by lenders that meet federal guidelines.  You would be surprised how many homeowners mistakenly assume their area does not qualify under RURAL location.  Click Here to find out if your address qualifies for USDA financing.  Under the terms of the program, an individual or family may borrow up to 100% of the appraised value of the home, which eliminates the need for a down payment.  Since a common barrier to owning a home for many low-income people is the lack of funds to make a down payment, the availability of the loan guarantees from the Housing and Community Facilities Program (HCFP) makes the reality of owning a home available to a much larger percentage of Americans.  USDA loans are also available to credit-challenged borrowers

• FHA which stands for Federal Housing Administration:  An FHA home loan is ran several ways and is designed to promote home ownership.  In most cases, FHA loans are mortgages obtained with the help of FHA.  With a small down payment, typically 3.5% of the purchase price, buyers can purchase a home.  FHA loans make it easier for people to qualify for a mortgage.  FHA loans are available to credit challenged borrowers.

• VA which stands for Veteran’s Assistance: A VA loan is guaranteed b the U.S. Department of Veterans Affairs.  The loan may be issued by qualified lenders.  The VA Loan was designed to offer long-term financing to American veterans of their surviving spouses (provided they do not remarry).  The basic intention of the VA home loan is to supply home financing to eligible veterans in areas where private financing is not generally available and to help veterans purchase properties with no down payment.  VA Loans allows veterans 100% financing without Private Mortgage Insurance or the necessity of any 20% second mortgage.

• Conventional Home Loan : A conventional home loan is a private sector loan, one that is not guaranteed or insured by the U.S Government.  Although a conventional loan is not insured or guaranteed by the government, it can still follow the guidelines of government sponsored enterprises such as Fannie Mae or Freddie Mac as both Fannie and Freddie are stockholder-owned corporations and are not part of the federal government.

Give us a call at 877.688.7582 or Contact Us through e-mail to discuss further details.