In Australia, you buy for speculation almost always.  On the high side, your Net ROI on a property is 3% and a lot of my clients have admitted to owning real estate with negative cash flows!  Here is why many of our Aussie friends are buying in Florida.

• Aussies are buying predominantly in Florida.  Why?  Highest cash flow in a state that has Disney World, thousands of golf courses, endless miles of beautiful beaches, significant job growth, (should I keep going?  Because I can).
• The top property hotspot of the USA has to be Florida, which attracts more than 40 million tourists per year and is still among the world’s top tourist destinations. Although the property market has slowed, the advantage is that prices are comparatively low and represent a good investment both for the property investor and those seeking a second home.
•  Florida in addition to its attractions is providing very high cash flow on entry level homes or sub $150k.
• Currency Exchange:  Today’s currency is what?  $1.06 I believe in the Aussie Dollar favor.  If you go to historic ratios, the Aussie Dollar is $0.64 to the USD.  Most speculators around the world expect the USD to improve over the next 3-5 years.  When historic balances return, your dollar ivested in todays market will yield you 38%.  This does not even account for the property cash flow or appreciation.  It’s appreciation of your dollar and that is a huge benefit.  The exceptional rate of exchange of currency offers buyers great value for their outlay.
• Net Yield or cash flow amounts range from 8-13% in SW Florida, some of the highest in metro areas across the country.  No war zones here.  Most of the homes being bought are 2004 construction and newer in exposed locations

Our investors no matter where they are from enjoy a true turnkey and passive real estate purchase.  Our firm is well capitalized and we have the capabilities to close on multiple properties from the same REO or distressed source getting us exceptional discounts.  We use our funds to purchase, our funds to rehab, and refer our clients to a well respected property manager who assists in tenant placement.  We do not require our investor to close UNTIL rehab is complete and tenants are living comfortably secured by a 12 month executed lease.

Don’t believe us?  Give me a call at 877-688-7582 and ask for Scott.  We are South Florida’s most reputable wholesaler.  Or simply e-mail me at Stallan54@Gmail.com .  Not only are we a wholesale firm but we are experienced licensed realtors that have the utmost responsibility to our clients as required by Florida law.

Real Estate Investor:

You are reading this offering memorandum as you likely became curious about the Southwest Florida real estate market.  Always the epicenter for exciting real estate topics, fortunately things have turned very positive over the last 8 months in our area.  From 2006 to 2010, Florida had been one of the hardest hit states in the nation due to the global financial meltdown, crash, recession, foreclosure crisis, or whatever else you would like to call it.

At our peak median home value of $325,000 in Lee County, levels dropped so quickly, bottoming our median at approximately $82,000 in February 2010.  Since that time, our median home price has gone up over 20%, improving to $106,300.  Indicative of this improvement is that lower end homes or entry level homes under $150,000 are flying off the shelves.  While we analyze the housing market daily, we see a majority of homes priced from $70,000 to $125,000 selling in 30 days or less.  More importantly, our unemployment rate has improved more than almost every metro area of the country, dropping by over 3 percentage points since 2009.

Residential real estate is certainly on its way back in SW Florida and tourism is soaring.  Fly into SW Florida International Airport and as you approach about 5,000 feet in altitude, you will see a playground of infrastructure improvements.  Lee County has always been pro-infrastructure which has resulted in extremely high tourism and new home ownership.  You will see construction of overpasses, bridges, widening of roads, and stadiums.  Yes, professional sports stadiums.  In today’s market, you can purchase a home at about 50% of the replacement cost and domestic and international investors are flocking to SW Florida to take advantage of the improving economy and never seen before home prices.

Single Family Homes priced $100,000 or less are currently trading at approximately 8-10% Net ROI prices and 2-4 family is currently trading at 10-14% Net ROI.  Your Net ROI is your Net Return on Investment, a number derived from taking your gross property income minus your expenses.  This would give you your Net Operating Income (NOI) which can then be divided by the purchase price giving you your Net ROI.  Investors love the return on their dollar while at the same time owning a tangible asset that can not only provide good cash flow, but a great hedge on inflation and upside (appreciation).  Single Family rentals total return offer lower volatility and outsized returns vs. other major asset classes even when accounting for the housing bubble and subsequent declines.

Our recommended Commercial properties are trading at about 9-10%.  Our focus at this moment in the Commercial sector is multi-family residential.  Due to the massive foreclosure crisis that affected our area, rental stock is in very high demand which has ultimately caused the rental rates to improve in 2011 for the first time in 6 years.  The years 2012 and 2013 are expected years where rental rates are to increase also.

We are providers of wholesale real estate.  According to a report by Morgan Stanley, wholesale real estate will offer real estate investors capital appreciation that they believe exists from the convergence of distressed to non-distressed prices as the backlog of inventory is cleared.  Historically, distressed homes offer discounts of about 5%.  In today’s market, discounts average 30-45%, meaning that wholesale companies are able to buy with deep discounts, rehabilitate the property and sell to real estate investors at an “under market value” or “below retail”.

As one of the largest wholesale real estate firms in SW Florida, our model is simple.  Utilizing our own cash and credit lines, we are able to purchase distressed homes from our sources at massive discounts.  Our full inspection allows us to budget repair costs where we delegate rehabilitative work to our staffed licensed contractor.  Once rehab is underway, we provide these as part of our inventory for sale to our investors.

OUR COMPETETIVE ADVANTAGE:  Due to our financial leverage, we do not require you as the investor to close on the property until all rehab work is complete and a tenant occupies your property at fair market rent binded by a one year lease.

• Think Tank Housing Predictor rated our area as the #1 recovering housing market in the U.S.A.
• Greater Ft. Myers area experienced biggest median increase year over year.
• Bankrate.com ranked Cape Coral / Fort Myers as the #1 best market for value
• Cape Coral / Ft. Myers rated #3 of 25 of “Best Places to Retire”

I have fielded numerous phone calls over the last 12 months from international investors looking for properties yielding 12% or more.  These areas do exist and they exist right here in SW Florida as well.  Higher yields typically mean greater risk or “buyer beware” areas.  Our current model for real estate investors is targeting more from a better location standpoint with a net yield of 8-12%.  SW Florida is also a great area to invest in its upside (appreciation).  As inventory levels are significantly lower than a year ago, values approaching replacement cost are expected within the next 3-5 years.  Currently, wholesale inventory can be purchased at 30-60% below replacement cost.

All homes are inspected for indications of Chinese Drywall.  Homes targeted are built of Concrete Block and Steel Construction with a stucco exterior finish.

Lee County consists of the following:  Fort Myers, Cape Coral, Bonita Springs, Fort Myers Beach, Sanibel Island, Captiva Island.

An excerpt from nationally syndicated real estate writer Scott Burns:

Today, after an improbable development, Cape Coral is every person’s dream of Florida, retirement and the good life — sunshine, water, fishing, 400 miles of canals and more sunshine. Not to mention golf.

And much of it is at a price people who actually work for a living can afford. …with the notable exception of cities like Detroit, you could sell your home almost anywhere in the country, move to Cape Coral and pocket some money.

According to the Lee County Visitors Bureau, nearly half a million international visitors came to the area in 2010, with more expected when the count is done for 2011. Many come from such places as Canada, the United Kingdom, Germany, Austria and Switzerland.

They come to vacation — and they come to buy with ready cash.

… more than 80 percent of foreign investors paid cash for their Cape Coral property. It isn’t difficult to understand. If you’ve ever been to Hamburg or Berlin during the winter, you know why the grass is so much greener in Florida that they will come here and pay cash.

LINK TO ARTICLE

Housing inventory down 22% nationwide WASHINGTON – Jan. 24, 2012 – Housing inventory slid to 1.89 million homes in December – down 6 percent from the previous month and 22.3 percent from the prior year, according to Realtor.com.

In the 145 markets tracked by Realtor.com, only Springfield, Ill., registered a year-over-year increase. Inventories plunged 49.7 percent in Miami, 49.1 percent in Phoenix, and 46.6 percent in Bakersfield, Calif.

Meanwhile, the national median price edged up 5 percent year-over-year.

Asking prices – the amount sellers include on a Realtor.com listing – climbed 32.5 percent in Miami, 21.7 percent in Naples, 21.5 percent in Fort Myers-Cape Coral, and 19.4 percent in Punta Gorda, according to Realtor.com.

However, asking prices were down 11 percent in Detroit, 10 percent in Chicago, 7.6 percent in Las Vegas, and 7 percent in Sacramento.

Source: “Housing Inventory Ends Year Down 22 Percent,” Wall Street Journal (01/19/12)

Let’s take an example of a listing we have located just about 3 miles west of Davis Island and 7 miles north of McDill Air Force Base.  The condo, located on Casabella Circle has an asking price of $225,500.  The unit consists of 3 full bedrooms, 2 full bathrooms, 1,619 square feet, and has an attached 2 car garage on the ground floor.  The home is decked out with granite countertops, carpet and tile floors, a private outdoor area, custom paint, stainless steel appliances, and ample space.  This particular condo has a market rental rate of $2,150 and is in within a stone throw to everything you need in South Tampa.  Let’s look at the economics of the deal.

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For a homeowner, it is far less to buy then it is to rent.  Let’s face it.  People don’t buy for 2 main reasons.  Either their credit is not sufficient or they don’t have the down payment.  Let’s assume you only have 10% down payment.  Without tabling another chart, your monthly debt + expenses comes to about $1,740 and that includes PMI.  So even if you only have 10% to put down, it is clearly more beneficial to buy as a homeowner.

For an investor, guess what…you have no choice other than 20% down   So let’s bump up your interest rate a bit and assume that instead of $1,397 as the table suggests, you are around $1,500 total debt and expenses.  That is still a $600 positive cash flow on your South Tampa condo investment or a Capitalization Rate of 7.5% and I threw in a 10% property management expense for the hell of it.  Unless you factor in a vacancy which some do and some don’t, that is a really good number.  Even if you throw a vacancy in there, you are still getting about 7% in a condo with tremendous upside potential.

As shown in this example, South Tampa Condos are back to being affordable.  If you are looking for additional information regarding the purchase of a condo in the area, please call Scott at 877-688-7582 or e-mail me at Stallan54@Gmail.com

Below is a roundabout map of areas including South Tampa that are ripe for investment opportunity.  Your investment could be an income property or your very own home you live in.

We look forward to hearing from you.

Now that things are heating up again, I want to point out first, that Tampa real estate was the 7th most searched real estate market on the internet, according to Realtor.com.  There are certainly bargains to be had and investors are focused on getting prime deals for major upside and income potential.

Most of 2011 was comprised of investors looking for major cash flow as opposed to speculative upside.  On Davis Island and Harbor Island, we are seeing investors buying condos not so much for the cash flow, but because of the upside potential.

Here is one that had both upside and some cash flow:  For instance, on the exclusive Harbor Island, a recent sale to an investor was a 3 bed, 2 bath condo with about 1,520 square feet.  The sales price was $219,000.  Investor put 20% down on a 5 /1 ARM mortgage where his monthly payment came to roughly $875 per month.  The property had taxes in the amount of $3,820 and monthly HOA dues of $525.  So the investor’s total debt service and fixed expenses came to about $1,675 per month.  The investor rented the unit within 2 weeks for $2,100, netting him a postive cash flow of $380 per month.

From a Capitalization Rate perspective, this condo is going to have a first year yield or Cap Rate of 6.8%, actually not bad at all considering the area.  Remember, higher cap rates or yields typically mean more risk.  Lower Cap Rates typically mean less risk from a location and demographic perspective.  On Harbor Island, a 6.8% Cap Rate is very favorable to the investor.  The Net Operating Income (NOI) on this unit is $15,080 which was derived from fixed expenses (taxes and HOA) minus the gross annual rental income.

Overall, Tampa Bay investment property is relatively doing well.  We are seeing droves of interest in the multi-family market due to annual improvements in rental rates.  Rentals are in high demand due to the foreclosure crisis and the previous homeowners transitioning to renting.  Currently, the Tampa Bay multi-family market is trading at about an 8% Cap Rate.  With the increasing rental rates, investors are almost sure to gain on that number over the next 3 years.

There are a ton of deals out there for homeowners.  Affordability is back in the market and you can actually step up your preference if you search hard enough for the deals.

By utilizing our services, our skilled team of real estate agents and professionals can help guide your toward what you are looking for.  We live and breathe real estate so once we know what you are looking for, we can offer numerous alternatives.  Please start by calling Scott at (877) 688-7582.   Or you can e-mail me at Stallan54@Gmail.com.

• Shadow Inventory is way down.  Banks no longer have the backlog of inventory they had in 2006-2010.  Indicative of the low shadow inventory is the fact that commercial REO assets almost no longer exist.  They are few and far between.
• Vacancy rate has dropped to 2003 numbers.  Rental Rates have drastically increased since 2010 stabilization.
• The ratio between the median household income and average mortgage payment based on the median price of housing is very favorable for buying with a +20% ratio.  This is the most affordable SW Florida has been in 4 decades.
• Mortgage Rates are below 4%, lowest in history.

If you can buy right, and hang on for a couple years, it could be the lowest-risk, highest-reward investment you ever make…And I will stand by that statement until someone convinces me otherwise.  The average price of a home in the area is $110,000, down almost 70% from the peak.  This in conjunction with Florida’s zero state taxes is one of the reasons Florida offers one of the lowest costs per living, and best of all, you are far from being in the boonies.  You are in a great, recovering metropolitan city.

If you are in the market for buying a  home and seek insurance on your home, you will notice some interesting information.  For instance, I just purchased a home for $105,000 from a bank and sank another $30,000 to completely remodel and update the home.  When the insurance adjuster came to my home, my policy was based on a replacement cost of $290,000.  A couple good things.  If my home burns to a crisp in a fire, I get $290,000 from insurance when I only have $135,000 into it.  Why?  Because to replace that cost from scratch will cost just about that much.

Homes are expected to reach replacement cost by 2015 in Florida.  Got a few years?  Buy and hold is the best strategy.  Earn about 8-10% Net on your money while renting but also enjoy your back-end resale price in a few years.

I’ll say it again:  If you can buy right, and hang on for a couple years, it could be the lowest-risk, highest-reward investment you ever make.

Need a job or proof that employment exists?  Hard sell if you look at our past numbers.  During our most depressed times, unemployment reached 14.9%.  Today, we are at 10.7%, the biggest improvement of any metro markets in the country.  Our industry consists of Tourism, Banking, Retail, Healthcare, and Construction.

The bust is over.  Time to buy.  Work with a great agent.  It’s important these days.  That’s what we’re here for.  Call me, Scott Allan at 877.688.7582 or e-mail me at Stallan54@gmail.com.  I am an investor myself and can share all of my personal experiences.  I don’t suggest unless I am invested myself.  Come see my properties.  We’re doing great things.

• Tarpon Point, a residential and luxury resort Marina in Cape Coral was sold to a luxury hotel firm based in Arkansas.  The new owners are keeping things pretty much status quo with same management.  The sale included the commercial properties including the Nauti Mermaid Grill and Bar, the Market 92 gourmet restaurant, and marina shops, and the marina itself.

• Cape Coral and Fort Myers were highlighted in two national studies.  One from Realtor.com and one from Trulia.  Both suggest that our market is in rebound and another study by Investor Magazine rated us the #1 recovering housing market in the country.

• Cape Coral – Fort Myers saw the biggest median listing prices in the country year over year.  Our 34.46% increase blows away #2 where Miami saw an increase of 25.63%.

• Price increases and activity is likely due to “would-be” retirees confidence that the worst is over in this housing market.  Additionally, international investors have targeted this metro area more than any other metro market in the country.

• A $1 billion gaming resort with 1,500 hotel rooms is being proposed by a business group for Fort Myers.  The decision is expected to be made in January 2012.

• Metro Parkway is in full construction mode for a massive expansion taking place from Daniels Parkway to Alico Road, an infrastructure improvement that is going to significantly improve traffic and make the subdivision of Briarcliff incredibly “in-demand.”

• SW Florida absorption rate dropped from 33 months at the worst to just under 9 months currently, the biggest improvement in absorption out of any other metro market in the nation.

• Bankrate.com, one of the leading mortgage giants has ranked Cape Coral / Fort Myers #1 best markets in terms of true value.  See article HERE

• Cape Coral / Fort Myers #3 of 25 for “Best Places to Retire”.

• Lee County hiring outlook is among the nations’ strongest according to Manpower, Inc.  About 22% of employers in the area expect to hire new employees from October to January, while 6% exptect to cut staff.  69% expect to hold steady.  The 16-percentage-point difference between positive and negative views was second behind only San Antonio at 17 percentage points.”The amount of employment activity we are seeing certainly supports that,” said Barbara Hartman, spokeswoman for Southwest Florida Works.

If you are looking for investment real estate or simply a primary or secondary home, you have come to the right place.  MyRealtySource.com, operated under Cozza Realty Group, Inc is one of the local leaders in wholesale and retail real estate.  We go over and beyond the normal realtors.  In addition to our local expertise in the area, our agents have a competetive edge with knowledge in construction and banking, giving you a 3 in 1 Turn Key operation.  Call Scott Allan at 877-688-7582 or e-mail us here.

Our real estate market is heating up quite a bit.  I’m not sure “heating up” is the right choice, but maybe “scolding”?…. Our Cape Coral / Fort Myers housing market has been selected as the #1 Recovering housing market in the country for Metro areas.  In fact, the most recent Year Over Year statistic showed that Cape Coral / Fort Myers had a 34.46% listing price increase.  That is insane!  That statistic is good enough for #1 in the country, as mentioned HERE on Realtor.com.

Duplexes are almost a thing of the past.  Banks are out of them and we are getting some here and there, but instead of averaging 6 duplexes on our firm’s inventory list, we are down to about 1 per 14 days.  Additionally, these prices are skyrocketing for duplexes.  Recent sales in the $90,000 range are much higher than what we offer them which is near the $80,000 mark.

Single family homes in Cape Coral are retailing for about $50 per square foot, up $5 over the last 6 months.  Fort Myers homes in the southern part of the city are also steadily increasing.  An area I really love in Fort Myers for investing is specific areas of South Fort Myers.  Our investors had a field day picking up great homes for under $150,000.  If you are looking for a pricepoint even close to that, you need to hire me as your negotiator because those prices are only achieved now with some serious leverage, something our firm has in this market.

I recently got lucky and picked up a golf course home on Overlook Drive in Fort Myers for $100,000.  A woman from Maryland inherited this home and wanted to fire sell it because she couldn’t afford the carrying costs.  I closed in a week at 100k, and have since, received nearly 220 agent hits on the MLS at $164,900, with 3 potential offers coming in this week.  That was my gem of the month, but working with specialists like us can help you achieve these types of deals.

So if you are looking to buy an investment home in Cape Coral / Fort Myers, you have come to the right place.  Please watch some of our videos on the right side of the website to see what our current projects are and what we are all about.  Feel free to e-mail me here or call me direct at 877-688-7582.

Continue reading Housing Predictor’s article here