Medical, Retail, Sports, Tourism…THere is a thriving medical industry.  New out-patient VA hospital just opened, etc…

The Minnesota Twins and Boston Red Sox each bring in about $100 million in revenue every year.  That is about to increase with the new Red Sox stadium.  $103 million stadium is currently under construction.  Maybe this link helps: Lee County

Major League Baseball is not dumb.  They don't approve for spring training facilities unless they know the public will pay for their revenues in a huge way.  Lee County was depressed, but is not the boonies.

This area is not desolate.  That clip of YouTube has circulated several times over the years and anyone in real estate will tell you that is outdated.  It's the very worse of the worst during the worst economic times. 

I guess I'll start here.. Hi Ben.  Thought I'd share some thoughts since I am getting a bunch of e-mails from the forum here about our area.  We are a firm out of SW Florida and know the micro markets well.  Without getting into too much detail Ben is right.  It is important to find a good property manager.  They are the most important ingredient here.  Although I invest in properties in my own area, I am a terrible property manager admittedly.  I use management services and they make my life easier. 

For those that have e-mailed me about what the difference of the areas are:  Lehigh Acres / Cape Coral / Ft. Myers.  They both hold great upside, but it depends what kind of investor you are.  Ft. Myers is vacation and resort type living.  Proximity to everything including world reknown beaches (Sanibel and Captiva Islands) You can buy a house for $200k and do weekly or monthly rentals during our tourist months.  ROI's are a little lower, about 6-7%, however most buy for the cheap prices, low expenses and speculation that prices will go up much higher in next 5 years.  Out of all micro markets in the county, this is probably true.  Class A Type

Cape Coral home prices are about 30-40% less than Ft. Myers homes.  Cape Coral is a very nice area.  Tons of waterfront.  We are seeing a lot of foreign nationals buying second homes as well as income properties here.  ROI for a single family home is about 9.5% on annual rentals.  Homes are newer, proximity and convenience is good and weather/amenities you can't beat.  Class B Type. 

Lehigh Acres: Real Estate is about 30% less than Cape Coral and about 75% less than Ft. Myers.  Rental rates are very high which are pushing up prices currently.  There has been a migration shift to Lehigh as cost of living is cheaper and proximity and location is just as good as other areas of town.  2 family homes (duplexes) are most popular.  I don't know many areas of Australia and I don't think Australians on this forum know too much about FL so if I can compare Lehigh Acres to a U.S area, I would compare it to Queens, NY?  Do you guys know Queens?  There are really good areas and not so good areas.  If you are on the "right side of the tracks", you can find yourself a great investment opportunity.  The more rural you get the worse.  We stay away from those areas.  Low prices, high cash flow and very minimal tenant problems.  ROI for duplexes 13% and single family homes about 10%.  Class C Type.

There are really no "surprises" or "gotchas".  Not that I can think of anyway.  Oh!  If you buy from us or from whoever, google "Chinese Drywall".  You don't want it and there are plenty of negligent agents in town that will entice an investor with a cheap price and sell them a home with chinese drywall.  If you buy a house for regular market value, you can cut your value by about 80% if you buy a home built with chinese drywall.  We inspect all of our properties and the first thing we look for is defective drywall.  It is actually quite easy to determine.  It's nasty stuff.

<moderator: delete advertising>

I have a lot of experience with Section 8.  I have properties in New Jersey that I have Section 8 tenants and my Florida properties I have rented to Section 8.  In my opinion, the stygma of Section 8 being problematic has been alleviated a bit.  Maybe its the economy.  But Section 8 is basically a privelege.  Most Section 8 tenants know that if they are reported, the housing authority will take their voucher privelege away forever.  If you let them know that upfront, problems are eliminated.  My tenants take care of my property as if it was their own.  However we do careful screening.  Filling out applications is one thing.  Looking them in the eye is another.

Hi Stuart,
Hope you got my e-mail response to your e-mail I received last night.  You are dead on correct about Tampa so your due diligence has been accurate.  What I did not mention in my e-mail was that pricepoints of 200-300k seem high unless you are going high-end condo.  At that price, it is highly unlikely your rent would cover your debt service and expenses.

There is a massive need for affordable rental properties which is why we keep our focus there, ie..under $100k within 10-15 minutes of Downtown Tampa.  These are not "war-zones", just more affordable living considered C-Class assets.

My opinion of course

There is no question that the U.S may be a bargain for the next couple of years.  Nationally this could be true.  There are pockets that look more interesting than others.  Today's fundamentals go back to cash flow.  If you can put yourself in a decent area and collect monthly cash flow, don't speculate on appreciation.  Not at least for 3 years.  Don't even use it in your pro forma.  I bought a few rental properties where the cash flow pays about 50% of my monthly bills.  Isn't that what one aspect of real estate is all about?  I have 2 others in my IRA where I can't touch the cash flow until I am a certain age, but I am ok with that.  I saw someone post about Texas properties cash flowing by $130 +/- per month.  That's ok if you believe the area will go up in value, but that isn't happening soon.  Not saying it is a challenging investment but just not for me.

I don't have any intentions of selling anytime in the near future.  If I sell them in 5 years for what I paid for them, they were worth it.  Truly I believe they will go up in value but it isn't part of my current strategy.  If the market plummets another 10%, I can afford that in a long term holding strategy as my cash flow will offset that. 

We service a German group that buys and probably half of them buy "site unseen", but not until we provide a full video of the investment and if rehab is needed, a before and after video helps.  We are also starting to shoot videos as we drive to show the neighborhood, surroundings, distances, etc.  Makes them more comfortable.  Perhaps this can be an option if you invest in other areas.

I noticed someone said something about Zillow.  Zillow is a great website for general information.  However, the site is normally 6 months outdated and should only be used for a ballpark estimate on your due diligence.  I've noticed that everything including median values, price per square foot, sales volume is almost always inaccurate.  If you are looking for more precise, talk to a local agent.  The best agents usually have good websites and a google search will help you find some. 

It's also important for those agents to be experienced in bank owned properties.  A realtor focusing on everyday homebuyer stuff doesn't have the experience an investment agent does where economics play a bigger role.  I always give my investors an example of the most recent property we do.  I give them access to county websites to cross-reference details so that they know we are actually factually doing these deals.  It's easy to say you do investor deals, another thing to prove it. 

Judith,
I am open anytime.  I am in World Plaza Commercial Complex behind the Val Ward Cadillac dealership.  A couple of real estate investments that are popular around here are the following:

• Lehigh Acres duplexes:  I own 4 of them (2 on Eisenhower / George Ave S, and Gilbert) and the cash flow would pretty much cover all my monthly bills if I didn't buy through my self directed IRA.  Some people like Lehigh, some don't.  I'm one that likes.  My tenants are great, in fact 1 of them Section 8 who is probably my best tenant.  International and local investors like the economics.  $15,000 Annual Revenue, $3,800 in operating expenses.  That includes $1,600 property taxes, $1,000 insurance, and $1,200 to my Property Manager.  I don't manage my properties nor do I manage any of my clients properties.  I focus on duplexes built 2006 or newer so really no other expenses yet.  Net Operating Income of $11,200 for a duplex that cost me $75,000.  Actually $68,000 + some rehab work.  Go to http://www.MyRealtySource.com which is our website and watch the video on duplexes.  They are pretty nice.  My intention is to hold for 5 years.  My value is already up, but my cash flow is most important.  I buy through a self-directed IRA, so cash flow is not taxable.  Replacement cost $180,000

• Cape Coral single family homes- I don't own any yet, but I will.  I'm looking at one now that is $79,000.  Gator Circle area (don't let the name fool you…there are no more gators there than any other area of FL.)  It's currently bank owned with a tenant paying $900 a month or $10,800 annually.  Total Operating Exp is $3,000.  Yes, cash flow is less than duplex but still decent.  Good area, near downtown Ft. Myers, etc…Replacement cost = $150,000.

• Ft. Myers:  I've sold some condos in Ft. Myers to mostly international investors.  They have bought in stable communities such as Gulf Harbor and Lexington.  The associations there are pretty healthy and you can buy a really nice condo for about half of peak price.  These are for those second homers that like boating, golfing, fishing, etc…and the good life.  The communities built during the boom, which unfortunately is most of them, I wouldn't touch with a 20 foot fishing pole.

• Lehigh Acres Single Family:  I own a house on 2nd St. SW.  I paid $50k for it and put $5k into rehab totalling $55k.  You can buy cheaper out in Lehigh but the area is probably superior to most.  Here is a link to see a picture:  2nd St House.  It's rented for $850 a month and I get a check for $782 every month after my Prop. Mgr extracts their fees.  Minimal operating expenses.  Taxes are $1,200, insurance $750, management is $816 annually.  Have had no problems with tenant or home issues.

Anyway, that is my 2 cents on what is favorable in the area.  As you know there are no real "war zones" in this area.  Sure there are lower income areas, but far from war zone.  Probably why investors favor SW Florida.

We have an office in Ft. Myers and one in Tampa.  We also have an office in New Jersey.  It is no coincidence that domestic and international investors are buying a lot of properties in SW Florida, especially Tampa.  A lot our our NJ investors are focusing their time in Florida.  The Tampa area is very big and even though you can get a nice house for $150k in some areas, that doesn't make it a good deal.  Until you speak to a property manager to verify rental rates, don't take anyone's word for it.  I have received calls from AU investors asking me rental rates in certain areas.  As an example, the area that was queried is an area where rental rates are $800 per month.  The AU investor sent me a proforma on a house where the agent represented $1,200 per month.  Very inaccurate, and had that investor purchased this house, they would have been very disappointed when faced with reality.

That being said, Tampa is the strongest area of Florida right now and despite the horror stories in FL in the recent past, values have stabilized as well as rental rates.  There are great deals in the area and in a lot of areas, for the right purchase price, your ROI can be pretty high.  Most of the shadow inventory that you hear about has already been sold and even though there may be more, Florida is far more ahead in terms of shrinking inventory than most areas nationally. 

Vacancy rates are very low as homeowners that have been foreclosed transition to being renters and yes, in some areas prices are going up.  The recent foreclosure listings pullback by the banks have already lowered inventory tremendously.  As the current  inventory sells, banks will slowly start releasing their REO's to sell at the increasing rate of absorption.  It means more money for the banks as more buyers enter into bidding wars.. We get a lot of the listings from some of the banks in our areas and the people we have spoken to believe the same thing.

So a UK company is selling real estate on the other side of the world?  Investors, please do your research and work with good LOCAL professionals.