Go to where there is a low amount of shadow inventory. Lee County, Florida has 1,000 backlogged REO's. That is down from nearly 70,000 in 2008. Properties under $150k are non-existent in Ft. Myers when you could easily do $115k about 2 months ago. In SW Cape Coral, you are at $50/ PSF when only 2 months ago you were at $42-$45 / PSF. Lehigh Acres SFR's are up almost 20% in 6 months. It is micro niche and micro markets.
Property Managers are complaining about a shortage of rental stock. April 2010, of all residential sold in Lee County 55% was distressed versus 45% normal sales. April 2011, distressed sales were 45% and normal sales comprised of 55% of total sales. This is a big deal.
Nationwide, there is a ton of shadown inventory. Not in Lee County. I am buying everything I can afford here with the resources I have left at the banks. Buying, rehab, flipping is doing well….But buying now and renting for 3-5-7 years is your way to winning.
Why is this happening? Unemployment went from 14.9% to 10.2% in one year. 10.2% was just reported May 1. The Gartner Group is building 120,000 SF building, adding 300 new employees will have a $181.9 million economic impact. LINK
Don't even get me started about the new Boston Red Sox baseball stadium. Biggest in the country and it will be massive. A HUGE economic stimulator here. Lee County will be the only county in the country with more than 1 major league baseball spring training stadium. Lee County will have THREE. LINK
Two major pharmaceutical giants are looking to build in Lee County due to very low land prices and the area's tax incentives for new business growth. If you fly into SW Florida Int'l Airport in Ft. Myers, you will see for yourselves the crazy infrastructure construction going on… Doubling the size of busy roads, convenience stores, gas stations, grocery stores going up where I would have never expected them to go up. You will see major construction going on within every 2 mile radius inside the county.
Median home price up 20% since October 2009. For those that have been considering duplexes in Lehigh Acres, forget it unless you want to pay $90,000. I had someone from this forum call me about 5 months ago. I had a great duplex I could have acquired for him for $75,000. He said he is going to wait until prices drop further. Wonder how that's going for him.
SW Florida was recently ranked #1 in real estate recovery: LINK
As most are aware, we are one of the biggest wholesale firms in the area, a true direct source to REO and distressed first generation properties, but I am not here to promote. Everyone knows here I am not a promoter, just offer area information. But I am giving you notice that time is running out in a great market that has clearly hit bottom and is now on the upside. As I mention to everyone, if you come here, you will clearly see value. No speculation. You can literally see it happening. Don't miss the boat. You can research and learn about markets all you want…but someone once told me the following phrase that is so important these days.
Education without application nets you NOTHING.
Hope to see you soon.
CHEEVES
http://www.MyRealtySource.comCheevesFinancial | Cushman & Wakefield - Commercial Property SW FL
http://www.CommercialRealEstateVoice.com
Email Me | Phone MeI can say I definitely agree and support everything you have stated. I have bought 2 properties this year, one in Fort Myers Shores and Cape Coral, 33990, and I am actively looking for more. I have missed out on at least 20 properties all of which have sold on the same day as released in The Cape and Fort Myers. One property actually sold within 2 minutes on the market. I dont look for the ultra cheap bargains but decent properties under 80K.
However, I am waiting for the 20% vacant bank owned forclosures to be released which are just still sitting there. Seems they are being released in dribbles. Any insight in this area???
There is a greater demand than supply at the moment which is clearly evident and I wonder, if the Americans are now getting their credit rating with banks back again, as it takes at least 2 years before you can borrow again from US banks!
I am waiting and while I am waiting and watching, I am buying the Florida Tax Liens!!!Shillabeer: Sounds like you have a good plan in place. Just be careful with title issues on tax liens. There are dozens of scams with those right now.
Regarding the 20% vacancy in the area, this is just untrue. At least in SW FL it is untrue. The vacancy rate is lower than 10%, and you can see the explanation HERE. See my comment on this page toward the bottom.
You can also see the county's REO status and get an indication of backlog HERE.
Shadow inventory is at such a low level that it is almost irrelevent now. There has been a major shift in sales where the sellers are normal sellers and bank sellers. It's been a 20% shift since this time last year.
The draw to the area is the thriving employment market. There is currently a good shift in demographics also where younger professionals are once again migrating to SW Florida, specifically Lee County.
Zip Code 33990 is SE Cape Coral. Good area for the right price. I invest in South Ft. Myers. I live there and love the area so I find a lot of value in it and the buyer activity is very strong right now. Long gone are the days of offering 20% less than asking price for homes under $150k.
My prediction is that if you buy prior to November of this year, your equity will be 20% by this time next year. It is widely expected that the snowbirds are going to buy in droves next winter season. We are expecting stronger than this past season and it was crazy then.
CHEEVES
http://www.MyRealtySource.comCheevesFinancial | Cushman & Wakefield - Commercial Property SW FL
http://www.CommercialRealEstateVoice.com
Email Me | Phone MeI think I had better hurry up and get a couple more properties in the area. I have been looking in 33914, 33990 and 33991 in particular and I avoid well and septic homes and drywall, of course. What is the area called or zip code for South Fort Myers. I am keen to have a look at the area and what would you expect as an average price for a 3-2-2 home.
I certainly noticed the huge drop in REO's and my Cape home was not a REO, normal sale and I paid asking price the same day the house was released back in April. Fortunately it was tennanted and I did not have to do a thing to the property.
I read your back logs and they were very interesting and I gather major business' are drawn to the area due to low land costs. Do you think LeHigh Acres will actually pick up due to the stadium being built. This is one area I certainly have been avoiding. I gather getting a tennant in this area would be extemely difficult.Thanks for the tip on Tax Liens. I did buy a few in Arizona back in January and a couple have redeemed. I dont want to spend too much on liens as I will need the cash to buy properties!!!
S Shillabeer
South Ft. Myers is 33919 and 33908. In these area codes, I have been very aggressive at buying rehab homes. Buy at $40-$50 per square foot and update them. You will likely be adding about $10-$12 per square foot for updating, depending on extent of work. Resale pricing has been $80-$105 per square foot. So flipping is possible. The most recent one I personally did I am going to rent out and hold for a couple years. This area is very demanded as it is close to everything. Homes are in the $150k range but have a huge amount of upside. Your cash flow won't be as high as other areas, but upside in S. Ft. Myers is huge.
Lehigh Acres is a good market in the right areas, just like Ft. Myers, Cape Coral, etc. There are areas to avoid and areas that homes are flying off the market. Everything in Lehigh is on well and septic. Much of Cape Coral is as well unless you are in the southern part of Cape such as your area that you bought in. Investors buying homes in Lehigh typically have renters before they even close. There is a huge demand for rental units all over the county and Lehigh is not an exception. There is a positive demographic shift taking place especially with the new stadium, proximity to airport, and other "job" areas.
Bottom line is that real estate is going crazy right now and it is even more positive that we are seeing a huge amount of first time homebuyers balancing out the investor and second home demand. Current income levels can support a significant real estate value improvement so I expect this market to show strength throughout the year.
CheevesFinancial | Cushman & Wakefield - Commercial Property SW FL
http://www.CommercialRealEstateVoice.com
Email Me | Phone MeThankyou so much for the information. My property in Cape Coral is on central water and sewer and I feel I was very fortunate to get it. I missed out on so many properties that sold same day and being in Australia, I literally have to get the offer in straight away due to our time differences. I will actively look in Sth Fort Myers.
I looked at your web site and see that your focus is on the newer homes, 2004 plus. What is your reasoning for this.
I enjoyed your video presentation, gave some great insight on the area and reassurance for myself to keep moving forward.
I intend to rehab , if necessary, rent and hold for about 5 years. I ideally would like about 5 properties in total.
ShillabeerI'm not giving you any more secrets unless you do business with me!
Glad you liked the videoes. Anything I can do to help, let me know.
CheevesFinancial | Cushman & Wakefield - Commercial Property SW FL
http://www.CommercialRealEstateVoice.com
Email Me | Phone MeHi,
Yes, Fort Myers is a good area. I am expanding into this area after concentrating on Orlando and Tampa which have great potential. How can one argue with places from $50K and no stamp duty!
If anyone is interested, please contact me.
Steve
[email protected]Sparky-
I live in Ft. Myers. I'm curious, where are you looking at homes in the $50k range? Off Palm Beach Blvd near downtown? Or off U.S 41 in North Ft. Myers? Those are the only 2 areas where these home prices exist and was wondering what your strategy was.CHEEVES
CheevesFinancial | Cushman & Wakefield - Commercial Property SW FL
http://www.CommercialRealEstateVoice.com
Email Me | Phone MeI live in Cape Coral and can agree to all the above. Its time to buy
Oh the heard mentality is alive and well in Lehiegh and fort Meyers.
don't think you can get hurt at 50k a house I bought a few a few years ago.
but remember there are over 750k thats seven Hundred and fifty thousand Platted lots that can be built on in Lehiegh and 300k plus in coral.
Infrastructure will be an issue in the coming years has been for the last 50.
But if you want a home to live in I do not think there is much better buy in the world than these.
with the amount of buildable lots I do not think you will see capital growth like you will in State Captial cities that have far more industry and jobs.
Not to be negative but A boston red sox winter league stadium will have next to zero impact, They only play there 6 weeks out of the year. This is not reason to think your investment is going to sky rocket.
JLH
Thanks for sharing this but I want to buy a residential apartment in new york at any place but it should have good appearance and it attracts everyone. What does it cost me?
Henry Smith wrote:Thanks for sharing this but I want to buy a residential apartment in new york at any place but it should have good appearance and it attracts everyone. What does it cost me?Loaded question residential apartment in New york can go from anywhere from 100k to 100,000,000 k
If you want something i Manhattan its 1 to 5 mil minimum anything under 500k will be a dump really.
Might consider taking the train out an hour or so to Jersey or connecticut to a rural little town and get something 300k and under.
HOpe that helps.
I've had a go at buying a few in SW Florida over the past few years.
Things seem a heck of a lot better now than my first visit in Nov 08. Prices are firmer and inventory is moving in days (sometimes hours) rather than weeks.
It will be interesting to see if the momentum can be sustained.
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
JayHinrichs-
The Red Sox stadium will have next to zero effect on the housing market? Wow..I'd love to get your reasoning for that. If you look at revenues, last I checked, the Spring Training season brings in tons of jobs and money, about $75 – $100 million per season. Then you have the full time season during the summer for minor league players. Granted it doens't bring in the revenue as to when the big dogs are in town, but it is still a money maker and yes it will have an impact on the economy and housing market. We are driven by the retirees and tourism…It's a fact. We don't rely on job growth as much as say New York City. Fly into Ft. Myers and you will see why snowbirds are zoned in on Lee County. The amount of infrastructure being developed now probably exceeds anywhere else in the country. And home prices are still dirt cheap. Buy here or go buy in the horse country of Ocala. Most will choose Lee County as there are things to do here..As far as your reasoning on the vacant land and how many homes will be built in future, capital growth, etc…look at it this way.. Let's say you buy a "lot" in Lehigh Acres for $4,000. Do you know what impact fees alone are? FYI, an impact fee is basically just a fee to the area that goes toward infrastructure, repairs, etc..among many other things. The impact fees in Lehigh are $10k to $15k.
Now you have let's say $20k before you even break ground. To build a cookie cutter house, you are looking at $80 per square foot, MINIMUM!! So if you build a typical home in Lehigh that is around 1,400 square feet, your construction cost is $112,000 (by the way, new construction homes are typically $130k + not including land). Add your other fees and you are at $125,000. It's called replacement cost.
You can buy a comparable "cookie cutter" home that makes a great rental for about $60-$65k per house. Yes, sure there are cheaper out there…but where is it in town and how much rehab is needed. I think I've been in every home priced under $55k in Lehigh.
So basically you are saying that capital growth could be non-existent, limited, etc when the replacement costs exceed current prices by almost 100%? Please explain. Construction will commence in this area when home values get near replacement cost. We are not there yet so homes have a lot of room to grow. If you look at the income levels versus median home price in the area, the proof is there for you.
Also, I am originally from Hoboken NJ and own http://www.NewJerseyRealEstateGuys.com. I won't get into the markets up there, but I am very familiar with the market up there…Did you use the words "New Jersey, Connecticut, and RURAL" in the same sentence? GEESH!!! Taking the train an hour from NYC will get you to Morris County, Essex County, Westchester County, and even parts of Long Island and Staten Island. Although these are suburbs of the NY Metro market, it is very very very far from RURAL.
Apartment complexes are best categorized like this in NJ or Florida…You have to base your budget on what is currently trading and what they are trading for. Here is where the market is for multi-family residential on a capitalization rate perspective: REITS, investors, etc..are buying at these levels all day long. If you ask any better, you will get killed by the competition.
Class A: 4-6%
Class B: 6-7.5&
Class C: 8-10%Sorry to say "stick up" for SW Florida but these are facts, not opinions of mine. Thanks. If you are ever in town, stop in. We are in Ft. Myers. I'll show you some amazing things happening in this area.
CHEEVES
CheevesFinancial | Cushman & Wakefield - Commercial Property SW FL
http://www.CommercialRealEstateVoice.com
Email Me | Phone MeI’m an investor/agent in Florida and the prices today are unbelievable.
First of all, it’s a buyer’s market. But you already knew that, so what’s stopping you? If you’re yearning to buy your first investment home, get past the media hype and the fear and into action.
I am interested with Lee County, the developer Windham is promoting its land lots at Magnolia Landing in the north of North Fort Mayer, anyone know this project? the price is $33,600 for a 600sqm lot and $150k total for a house on it, I am considering by the land only, the developer promise a 3 years 3k/year tax and fee paid by developer. Is this a good deal? Or I should buy a house in south Fort Mayer?
Tonybao:
Ummm…South Fort Myers….definately…that's an easy one. Too easy
CheevesFinancial | Cushman & Wakefield - Commercial Property SW FL
http://www.CommercialRealEstateVoice.com
Email Me | Phone MeCheevesFinancial wrote:JayHinrichs-
The Red Sox stadium will have next to zero effect on the housing market? Wow..I'd love to get your reasoning for that. If you look at revenues, last I checked, the Spring Training season brings in tons of jobs and money, about $75 – $100 million per season. Then you have the full time season during the summer for minor league players. Granted it doens't bring in the revenue as to when the big dogs are in town, but it is still a money maker and yes it will have an impact on the economy and housing market. We are driven by the retirees and tourism…It's a fact. We don't rely on job growth as much as say New York City. Fly into Ft. Myers and you will see why snowbirds are zoned in on Lee County. The amount of infrastructure being developed now probably exceeds anywhere else in the country. And home prices are still dirt cheap. Buy here or go buy in the horse country of Ocala. Most will choose Lee County as there are things to do here..As far as your reasoning on the vacant land and how many homes will be built in future, capital growth, etc…look at it this way.. Let's say you buy a "lot" in Lehigh Acres for $4,000. Do you know what impact fees alone are? FYI, an impact fee is basically just a fee to the area that goes toward infrastructure, repairs, etc..among many other things. The impact fees in Lehigh are $10k to $15k.
Now you have let's say $20k before you even break ground. To build a cookie cutter house, you are looking at $80 per square foot, MINIMUM!! So if you build a typical home in Lehigh that is around 1,400 square feet, your construction cost is $112,000 (by the way, new construction homes are typically $130k + not including land). Add your other fees and you are at $125,000. It's called replacement cost.
You can buy a comparable "cookie cutter" home that makes a great rental for about $60-$65k per house. Yes, sure there are cheaper out there…but where is it in town and how much rehab is needed. I think I've been in every home priced under $55k in Lehigh.
So basically you are saying that capital growth could be non-existent, limited, etc when the replacement costs exceed current prices by almost 100%? Please explain. Construction will commence in this area when home values get near replacement cost. We are not there yet so homes have a lot of room to grow. If you look at the income levels versus median home price in the area, the proof is there for you.
Also, I am originally from Hoboken NJ and own http://www.NewJerseyRealEstateGuys.com. I won't get into the markets up there, but I am very familiar with the market up there…Did you use the words "New Jersey, Connecticut, and RURAL" in the same sentence? GEESH!!! Taking the train an hour from NYC will get you to Morris County, Essex County, Westchester County, and even parts of Long Island and Staten Island. Although these are suburbs of the NY Metro market, it is very very very far from RURAL.
Apartment complexes are best categorized like this in NJ or Florida…You have to base your budget on what is currently trading and what they are trading for. Here is where the market is for multi-family residential on a capitalization rate perspective: REITS, investors, etc..are buying at these levels all day long. If you ask any better, you will get killed by the competition.
Class A: 4-6%
Class B: 6-7.5&
Class C: 8-10%Sorry to say "stick up" for SW Florida but these are facts, not opinions of mine. Thanks. If you are ever in town, stop in. We are in Ft. Myers. I'll show you some amazing things happening in this area.
CHEEVES
My point was that a Minor league stadium in the US is not a game changer, no pun intended,
I am not an expert on Leheigh although I was there in the mid 80's as part of a steering committee for the state of CA to discuss how states are going to deal with these HUGE subdivisions 750k platted lots in the 50's with in adequate infrastructure for full build out.
Yes I think it will be years here, and as a matter of reference we build homes in Oregon for 65 a foot not 80. but we are builders and that is basically cost.
A stadium like this in a city that proportionately thrives on tourism IS a game changer. Revenues are going to drastically increase with the Red Sox in addition to JetBlue putting vacation packages together. The Red Sox have been here for years, but this new stadium is creating international hype and if you haven't seen how popular our area is during spring training, try booking a hotel here from January to May. FYI, JetBlue got the naming rights to the stadium and Ft. Myers has long been suspected as being a future hub of JetBlue.
In Lehigh, infrastructure was actually INADEQUATE. Tons of homes were built mostly by investors because they thought cheaper was better and during the boom, Cape Coral became pricey. Today, there is massive infrastructure construction going on tying Ft. Myers and Lehigh Acres together. You can see that all day long driving around or it is right below you when you fly into the airport. Can't miss the major construction going on.
Getting back to the stadium, it won't take our unemployment from 10% to 8%, nor will it have a major affect on income, but everytime something major is developed in this area, small businesses follow and small business is the backbone of our economy. Look what happened when SW Florida Int'l Airport expanded in 2001….look at the Coconut Point and Gulf Coast Town Center affect….lastly, look what Major League Baseball does for this area during the first half of the year, or at least until April.
Most people can't build for $65 a foot because they are not contractors. You and I can do that, but I always say $80 a foot which includes retail cost typically.
CheevesFinancial | Cushman & Wakefield - Commercial Property SW FL
http://www.CommercialRealEstateVoice.com
Email Me | Phone Me
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