Lehigh Acres Florida ?

For me they are but other investors are happy to buy homes with septic systems.  Please also make sure you purchase a property that is within a reasonable distance to a fire hydrant or you may find that you cannot get insurance.  Don't buy anything that is in a sparsely built area either.

Still in town until the 24th March.  Been meaning to catch up but time just gets away.   Like I say, many are happy to buy with septic and pump, it's just not for me when there are so many other great buys.  My Lehigh house is in the Richmond/Third area but I'm not actively looking to buy more out there.  This one was just a great big beautiful lot with a reasonable house rented @ $725,  Paid $34.000 spent a bit under $2000 for rehab but only the cooling works on the aircon so will need to pay $2700 before next winter.  It is the worst house in the street but the plan is to pull it down in 5 – 8 years, build a nice home and sell.

I just got back from my Florida trip.  I am from Connecticut.  Been doing online due diligence and found this forum.  Met with several real estate agents, most of which were pretty incompetent or uneducated in the market.  I will address the Lehigh Acres market though.  Lehigh you have to take for what its worth.  Is there crime?  Sure, but most of it is non-violent.  There were more homes foreclosed on per square mile in Lehigh than there were in Cape Coral and Fort Meyers so inevitably things like house components and screens among other things were stolen and probably created an eyesore.  Lehigh is not paradise, nor is it the ghetto.  It is your traditional lower to mid income demographic.  But I was not deterred.  What I did see was an opportunity for immediate cash flow and good cash flow.  I read someone elses post about Cape Coral and Lehigh.  Two TOTALLY different markets, but you get more for your money in Lehigh and your money effectively gains more value there in my opinion.  Cape Coral is pretty nice, but prices are higher.  If I am a speculator, I like Cape Coral.  If I am a cash flow person with hopes of marginal appreciation, Lehigh is also good for that.  Fort Myers prices are just high and more high end.

Watch out for Chinese Drywall.  And watch out for lower prices.  I looked at a home I saw on a public website for $44,000.  It honestly didn’t look like it needed a whole lot of work.  I was thinking $3,000.  Ends up the rehab estimate was over $10,000.  I saw 4 realtors.  Three of them gave me their opinion on what it would take to fix the home.  I called a handyman and a contractor to look and they said the same thing.  Cheapest bid I got was $10,350.  Oh, and the comment about well and septic?  Join 50% of the club in the county.  Its common utilities down here and the county doesn’t have the reserves to pay for expansion anytime soon. 

After doing due diligence and getting the right property in my opinion, I am happy in Lehigh.  I wasn’t really deterred from anything out of the ordinary.  Has great potential with a lot going on in and around it.  We’ll see though as I do not close for about a month.  I guess it could be risky to some, but after visiting it’s a risk I’m willing to take. 

In conclusion, work with someone that has experience.  How do you find that?  I don’t know, but you will determine much by simply talking to them.  Your result will probably be a great investment if you have the right team.

cwagner, good post.  I private messaged a response to one of my earlier posts so a bit was missed here.  I think you are quite a bit off with your 50% on well and septic and would be interested to hear where you looked.  Not sure how long you were here but if you come back let me know.  I'll here until the end of March and will be back in early July for an extended time.  The costs of connection to services in Lehigh is not what puts me off as you are right in that it will be years before this happens, it's the maintenance of the pump and septic.  I know these can go forever with no problems but for vacant landlords it is just something else to go on the list of things that can go wrong with their property that someone else has to attend to on their behalf.  Vacant landlords always need to compile a list of maintenance issues, how old is the HWS, airconditioner, white goods and roof.  These all need to be assessed while doing due diligence.  How far is a property from a fire hydrant?  My Insurance Broker tells me that some properties in Lehigh are uninsurable due to being too far from a hydrant.   After all due diligence is done it still comes down to gut feeling and there is just something about most parts of Lehigh that I do not like.  Others love it

Judith Ottosen
Property Investment Services
FORT MYERS

I think I really need to make the effort for that cup of coffe Cheeves, maybe Monday as I'll be very close for part of the day. 

Hi,

I have been to Lehigh Acres on my trips to the US, and had a good look around.

I think the name says it all… 'acres' implies land, and lots of it – and so there is in Lehigh.

With the lack of scarcity, land prices are extremely low. No one is building on it either because falling property values mean that it is far cheaper to buy second hand than build new. There are also many foreclosures keeping a lid on prices (both short sales, REOs and mortgage foreclosures). It is doubtful whether there will be any capital growth in Lehigh in 2011.

So, as is often the case in real estate, there is opportunity… but you need to have the time, money and skill to access it. The opportunity is cash flow (rentals), flips, vendor finance etc.

I would NOT buy in Lehigh without going to see it first hand, nor would I buy unless I had my management team there to look over my investment.

To date I have bought (with  my business partners) around 60 properties in the Ft Myers area. None of them are in Lehigh though.

– Steve

P.S. Further information on Lehigh at: http://en.wikipedia.org/wiki/Lehigh_Acres,_Florida

Steve,
I live in Ft. Myers.  What types of property are you buying and what do your cash flow numbers look like?  I am wondering why you buy 60 properties in one town and exclude others.  Just curious

I am not exclusive to Lehigh and Cape.  I live in Ft. Myers and am always looking for opportunity there as well.  We started our Tampa program about 3 months ago after giving it a trial run for ourselves.  The homes in Tampa are older, but well built (concrete).  Tampa is a little different.  We'll buy the homes for about $40,000.  Some need a new roof, but most we almost gut the place.  Since most have not been updated, we update electric, any plumbing that is not up to code, kitchens, bathrooms, etc.  We won't get too fancy, but at least updated.

PropVest has asked the question a few times about where to expect more capital growth.  This is almost impossible to answer because each area has different factors.  Furthermore, it has to be measured in percentages if you are a speculator.  For instance, in Lehigh Acres, you buy an $80k duplex and in 5 years I assume the value will be $130k.  That is an increase in almost 60%.  In Fort Myers if you buy a home for $150k and it goes to $225,000, that's about an improvement of 60% as well (no calculator..guesstimating here). 

So, you will make more money in Ft. Myers but your ROI stays the same.  You have to spend more to make more I guess is what I am trying to say but overall, your ROI is going to be your gauge. 

I just assisted in the sale of an REO home in Ft. Myers for $185k for 2,500 square feet.  The cap rate is going to be about 7%, lower than what most expect, but we both agreed that this home should be much higher in 5 years.  My client is a speculator.  If that is your thing, that is fine.  Everyone has their own strategies.  He bought betting on the market to improve in 5 years significantly.

I also just sold a duplex to an investor out of Israel.  His reason for purchasing was different.  Although I like to speculate as well, I also changed my temporary investment strategies.  I explained to this guy in the past that it may be a good time to get back to the old school fundamentals of real estate which is cash flow and put speculation as secondary.  If you can get 10% + on a property, that is the target.  If it goes up in value in 5 years, that is bonus… So he bought strictly for cash flow.

What price are you willing to pay and what is your strategy?  Everyone has their own reasons for investing.