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Message
re: Gulf Shores/Orange Beach condos
Posted on 2/21/24 at 7:39 am to Captain Want
Posted on 2/21/24 at 7:39 am to Captain Want
Own in destin
Bought at 525k. Mortgaged $375 @ 2.8% so $2000/month
grosses $48-50k/year
Condo fees roughly 12k/year
rental company takes 20%
taxes, ins, repairs, etc
It doesn't quite cash flow but it's gone from $525 in 2021 to roughly $825k in that time
I'm tempted to sell, but there's no "deals" to be had and I'd be making a lateral move with a higher interest rate
Bought at 525k. Mortgaged $375 @ 2.8% so $2000/month
grosses $48-50k/year
Condo fees roughly 12k/year
rental company takes 20%
taxes, ins, repairs, etc
It doesn't quite cash flow but it's gone from $525 in 2021 to roughly $825k in that time
I'm tempted to sell, but there's no "deals" to be had and I'd be making a lateral move with a higher interest rate
1
Posted on 2/21/24 at 9:32 am to Tifway419
You got in on the dip.
Posted on 2/21/24 at 9:36 am to Captain Want
The market here is taking a pause, price points are down 5 to 10 %.Rental income is strong but down from last year. Insurance is up especially on my house in Bear Point.
Posted on 2/21/24 at 10:22 am to Captain Want
In my opinion, the best values currently are in Panama City Beach. PCB bottomed out a few years ago and is climbing back in value. Destin has peaked and is on the way down in my opinion.
ETA: my advice to people always when buying investment properties in vacation areas… Buy a place that you will want to vacation (whether that is the beach or the mountains or wherever). Don’t expect to make any significant profit off of the yearly cash flow. Your gains will come in the appreciation. In the meantime, you get to subsidize your vacations by staying at your own place.
ETA: my advice to people always when buying investment properties in vacation areas… Buy a place that you will want to vacation (whether that is the beach or the mountains or wherever). Don’t expect to make any significant profit off of the yearly cash flow. Your gains will come in the appreciation. In the meantime, you get to subsidize your vacations by staying at your own place.
This post was edited on 2/21/24 at 10:25 am
Posted on 2/21/24 at 10:34 am to GeauxTigers123
quote:
What would you recommend to read for someone interested in getting started in rentals?
Join the forums at Bigger Pockets and make it a daily read like TD. It's free for forum access, but the $100 a year for podcasts is worth it IMO.
LINK
This post was edited on 2/21/24 at 10:46 am
Posted on 2/21/24 at 10:53 am to Captain Want
Mom owns in Perdido Key and I was actually looking at buying a condo of my own down there, but if you're financing with a 6% interest rate, there is no chance you can cash flow it. Her HOA fees have doubled in 10 years and she seems to get hit with an assessment after every 4-5 years or so. HOA fees are now more than the mortgage. My complaints mainly lie with the property management company.
We had a great year of rentals last year doing it ourselves on airbnb and basically broke even with insurance, taxes and the HOA.
Getting everything repaired and working with the contractors after Hurricane Sally was a complete disaster as well.
We had a great year of rentals last year doing it ourselves on airbnb and basically broke even with insurance, taxes and the HOA.
Getting everything repaired and working with the contractors after Hurricane Sally was a complete disaster as well.
This post was edited on 2/21/24 at 10:55 am
Posted on 2/21/24 at 11:14 am to anc
Struggling through my first year of investing in real estate, got in at an awful time but trying to make the best of it. Thanks for the resource!
Posted on 2/21/24 at 1:54 pm to anc
I have a few questions for you.
Did you buy most of your properties before the recent run up in value of the last 4 years?
Did you initially finance most of them (I see that some are mortgage free form your post)?
Have you been able to keep to the 1% rule? I don’t see much that would work with that rule in the current market.
Did you buy most of your properties before the recent run up in value of the last 4 years?
Did you initially finance most of them (I see that some are mortgage free form your post)?
Have you been able to keep to the 1% rule? I don’t see much that would work with that rule in the current market.
Posted on 2/21/24 at 6:44 pm to GeauxTigers123
Did you buy most of your properties before the recent run up in value of the last 4 years?
Most but not all. I started in 2017, added a couple in 2018, bought the big one in 2019, and added two in 2020, paused in 2021 and bought two more in early 2022
Did you initially finance most of them (I see that some are mortgage free form your post)?
I paid cash for most of them. I put 20% down on the big one and did what you would call a traditional deal on the beach condo. The other two that I have small mortgages on were unique deals in the sense of I was cash poor so I financed like 30% on one property. The other one I got 2.5% on - which is super odd for a investment property.
Have you been able to keep to the 1% rule? I don’t see much that would work with that rule in the current market.
As you can see, only 1 of my properties is really hitting the 1% rule.
You didn't ask, but I believe we are about to see a mass exit from the AirBnB markets so there will be some deals coming. I don't know if it was boredom, but 2020-21 saw a lot of people enter the rental markets. There is no way they are cash flowing much, so when they have a big expense that wipes out 2 years of income, they are going to want to sell.
I stayed in a Gatlinburg cabin over Christmas that was listed for $1.1 million. It sold for $400k in 2019. It was crap. I have been following and a similar cabin in the same development just listed and sold for $740k.
Most but not all. I started in 2017, added a couple in 2018, bought the big one in 2019, and added two in 2020, paused in 2021 and bought two more in early 2022
Did you initially finance most of them (I see that some are mortgage free form your post)?
I paid cash for most of them. I put 20% down on the big one and did what you would call a traditional deal on the beach condo. The other two that I have small mortgages on were unique deals in the sense of I was cash poor so I financed like 30% on one property. The other one I got 2.5% on - which is super odd for a investment property.
Have you been able to keep to the 1% rule? I don’t see much that would work with that rule in the current market.
As you can see, only 1 of my properties is really hitting the 1% rule.
You didn't ask, but I believe we are about to see a mass exit from the AirBnB markets so there will be some deals coming. I don't know if it was boredom, but 2020-21 saw a lot of people enter the rental markets. There is no way they are cash flowing much, so when they have a big expense that wipes out 2 years of income, they are going to want to sell.
I stayed in a Gatlinburg cabin over Christmas that was listed for $1.1 million. It sold for $400k in 2019. It was crap. I have been following and a similar cabin in the same development just listed and sold for $740k.
Posted on 2/21/24 at 6:51 pm to anc
Here's a possible STR I am looking at in Nashville
LINK /
$6200 HOA is steep. But I think I can net close to $30k out of this and hope the property takes off. Selling for $450k. Hold for five years and make $150k in rent and $150k in appreciation. If the Super Bowl comes to Nashville in 2030 I would hold until then. $300k for a little paperwork.
This is the kind of stuff I really want to get into.
LINK /
$6200 HOA is steep. But I think I can net close to $30k out of this and hope the property takes off. Selling for $450k. Hold for five years and make $150k in rent and $150k in appreciation. If the Super Bowl comes to Nashville in 2030 I would hold until then. $300k for a little paperwork.
This is the kind of stuff I really want to get into.
This post was edited on 2/21/24 at 6:54 pm
Posted on 2/21/24 at 9:13 pm to anc
quote:
Selling for $450k
You want to buy a 700 sqft condo for half a million?
Posted on 2/21/24 at 9:40 pm to Upperdecker
In one of the hottest real estate markets in the world?
Yes.
Yes.
Posted on 2/22/24 at 10:20 am to anc
Thanks for posting. Im kinda weary of buying just based on hope of future appreciation.
I also kinda wonder if I get into real estate game, will I always be checking the s and p 500 to see what I could have made relative if I had put the money there. But I guess diversity of assets is a good thing.
I also kinda wonder if I get into real estate game, will I always be checking the s and p 500 to see what I could have made relative if I had put the money there. But I guess diversity of assets is a good thing.
Posted on 2/22/24 at 1:54 pm to GeauxTigers123
It's really about diversification for me.
I don't love real estate but it has a solid track record when you zoom out. My brother in law is a CPA that deals with $10MM net worth - everyone in that level is heavy in real estate.
I don't love real estate but it has a solid track record when you zoom out. My brother in law is a CPA that deals with $10MM net worth - everyone in that level is heavy in real estate.
Posted on 2/22/24 at 2:58 pm to Captain Want
My MIL has a 2/2 in orange beach near the florabama that she bought in 2009 as a foreclosure.
I want to say she bought in the $250k range and now units in her building that are same size are selling for $700k minimum.
This was a hell of an investment by her.
I want to say she bought in the $250k range and now units in her building that are same size are selling for $700k minimum.
This was a hell of an investment by her.
Posted on 2/22/24 at 3:43 pm to Captain Want
the values should start coming down, financing is horrible on condo's right now. Fannie Mae/freddie mac now classify second homes as rental properties when it comes to interest rates. So a first home rate is 7% today and a second home/rental property rate is 7.875% with a pretty good discount just to get that rate. Gone are the days when you could buy a second home and get a first home rate on it.
Posted on 2/22/24 at 3:45 pm to SloaneRanger
Standard
Posted on 2/22/24 at 3:56 pm to LSUbub12
quote:
My MIL has a 2/2 in orange beach near the florabama that she bought in 2009 as a foreclosure. I want to say she bought in the $250k range and now units in her building that are same size are selling for $700k minimum. This was a hell of an investment by her.
250k invested in “the market” with all dividends reinvested would be nearly 1.5 million today. This is based on average S&P returns since then.
Posted on 2/22/24 at 6:04 pm to Dawgfanman
quote:
250k invested in “the market” with all dividends reinvested would be nearly 1.5 million today. This is based on average S&P returns since then.
Well anyone can play this game. It’s all about diversification and spreading your wealth across different asset categories. You’d be crazy to have everything in real estate and the same is true of the market. If you are a person of means and aren’t partly allocated to hard assets you’re doing it wrong. She and her family probably got a lot of enjoyment out of that place too.
Posted on 2/22/24 at 6:43 pm to SloaneRanger
quote:
Well anyone can play this game. It’s all about diversification and spreading your wealth across different asset categories. You’d be crazy to have everything in real estate and the same is true of the market. If you are a person of means and aren’t partly allocated to hard assets you’re doing it wrong. She and her family probably got a lot of enjoyment out of that place too.
It’s also silly to say “she bought at x now it’s worth 3x what a great investment”. How much did insurance, taxes, association fees, assessments, repairs, updates, etc cost over the years? In other words, what’s the total investment here? My home is worth 3 times what I paid, but with the interest over the years and all the other stuff I posted about above, I doubt really come out ahead by that much when I sell. But I did have a place to live so at least it is something.
And I wasn’t advocating for anyone putting everything in one asset class.
This post was edited on 2/22/24 at 6:52 pm
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