I just moved to Fl and would like to do a flip. I would like to hear any advice you have. Is 20k enough to get into a flip with?
thanks
auggflo
i’m assuming you’re new and have limited experience and are talking about a fix and flip.
many parts of florida are stagnating and you might be stuck with higher costs than you calculated, longer holding periods and no profit. plus you might need $30,000 to cover closing, repairs and holding costs.
so to save you the hassle, just write me a check for $5k and we’ll call it even. ;D
I’m in a very similar situation… living in Florida with around 20-25k starting capital. I personally don’t believe this is the time in Florida (southern area especially) to flip if you have limited capital for a downpayment. I would instead consider picking up rough rental property to produce cash flow while rehabbing it.
You can sell it later when the market begins its recovery (my guess is right after hurricane season if we get away mild), and in the mean time make a little cashflow and get your feet wet.
If you want to look for a short term 1-2yr investment where you really want to hold and then cash in some, i recommend looking into some of the condo conversions in orlando and tampa area where the developers are giving 1 to 2 yrs guareentee rents, no hoa and some paying taxes also for 1 to 2 yrs. Many will actually cashflow, since they are giving you the rent money based on 90% purchase price at 6% interest into an escrow account and you get to collect whatever rent you get on the unit. You can cashflow $400-600 a month on some of these deals and then sell or take a couple months to get a tennant and look for a lease option tennant…
if your interested, i can send you an a brokers email address i know who deals in these. With 20K, you can actually get into about 4 of these deals…usually its about $5000-6000 out of pocket cost, but depending on closing cost, you can get money back… One i am doing now, was $6000 down, but at close I will get about $4500 back from escrow as developer is paying $7400 in closing and i am doing 100% financing… Getting another $16500 escrowed for mortgage, $6000 back 10days after realtors gets hub-1 statement and no HOA for 1yr… Mortgage $2000 month, unit will rent for $1600 month, taxes about $4000 hyr (est) free 1 yr maintance policy…purchase price $304K, appraised at $340K…not to bad…looking for a Lease option on mine for 1 yr at about $320-330K is my exit plan…
while i know a few people who’ve bought into similar deals, i wouldn’t recommend these.
Where do you think the money comes to pay the rent, hoa and taxes for 2 yrs from? its included in the purchase price!!!
its basically a seller rebate to move inventory because the market is slowing down. In san diego, builders are offering the same things now. 2 years ago, these were unheard of. but now builder rebates are common. free plasma tv, no hoa or property tax for a year PLUS a free car!
Instead of lowering the price, the builder is just giving you incentives worth that amount. Its the wrong time to get into such investments in my opinion.
Well i am recommending tampa and orlando since the condo market is still hot in these areas as they are still very affordable. yes they are giving incentives to buy for investors and most complexs are aboout 60% investor bought. Comps are supporting purchase prices, and your not buying with alot of equity because of the incentives unless you get a developer closeout where the developer has already left the condo and has turned it over to the association already. They are paying the HOA for you…some will escrow taxes and etc…
its great also if your looking to live in it… I did one in Zephyer Hills (north of tampa)…it a 2 yr program. The 2/2 unit bought for 115K, units are selling for 160K now…and i got the incentives on it…area is still appreciating since it is undervalued…