Real estate investing is a big draw for many due to its strong ROI potential as well as its flexibility in investment strategy. There are a lot of ways to make money in real estate without keeping your finger on the main pulse of the deal. This is most evident when it comes to wholesaling and assigning contracts. Buying and reselling interest in a property allows for increased earning potential. It also allows for expedited turnarounds on deals.
Assigning contracts allows investors to sell interest in the property title without being responsible for following the deal all the way through. Essentially, investors can buy and sell properties without ever having to lay hands on the property itself. While this definitely has it’s perks, it is not without risks.
President-elect of the Central Florida Real Estate Investors Association, Todd Hutcheson, joins us today to discuss his experience starting out in wholesaling and assigning contracts. Listeners will remember Todd from episode 111, in which he discussed how investors can get into real estate with limited cash. Todd is an investing mentor. He is the founder of IBuyHomes and an active wholesaler in Central Florida. As he shares in this episode of Landlord Tales, assigning contacts can quickly become a snowball effect and your control over a closing can disappear before you know it.
What to Know About Assigning Contracts
Understand contract assignment process before selling interest
Write your control over closing into the contract
Contract assignments do not show up under public records
A final sale price listed in public records will not record contract assignments
Make sure to notify title companies of contract assignments when recording a title claim, otherwise it will not be insured
Florida is a huge market for vacation rental property investors. Florida is a leader in the tourism industry and vacation rentals are rapidly becoming a major economic power.
The rise of shared lodging options has led to a surge of interest in vacation rental properties from investors.
Despite increased economic impact, the vacation rental industry remains a complex and sometimes hostile landscape for investors to navigate. Regulations on vacation rentals vary widely on a state, municipal and association-based level.
Denis Hanks, Senior Director of the Florida Vacation Rental Managers Association (FVRMA), knows just how complex this landscape can be. For over 21 years, FVRMA has been a legislative voice for the vacation rental market industry, in addition to providing property management solutions. Denis brings 20 years experience in state and municipal government to FVRMA’s oversight and efforts.
This episode, Denis discusses some things investors should know for the vacation rental industry in 2017.
Florida Vacation Rental Industry
$31 billion/year economic impact
Captures nearly 50% of tourist dollars
Comprised of condos, single family homes and luxury home resorts
4,000 new developments dedicated to vacation rentals
25% of U.S. vacation rental market
3 Things to Know for 2017
Frequency and Duration
FL Statute 509 – preemption protects property owner rights; State cannot prohibit frequency and duration for vacation rentals
Regulations can change from municipality to municipality
Investors need to do due diligence on local zoning/compliance regulations
Be aware of condo/homeowner association regulations
Top 2 international buyer markets in FL
Most hostile regulations
$20,000 violation charges in Miami; $1,000 per dy fines in Ft. Lauderdale
Pressure from local officials to remove Statute 509 Preemption
FVRMA provides a voice for vacation property investors in the state. Members have access to educational resources in addition to legislative lobbying. To find out more about the services offered by FRVMA, visit their website www.fvrma.org or call 407-201-0120
To contact Denis regarding what you can do to learn more about being a vacation rental investor, email him at email@example.com.
Would-be investors always want to know ways of getting into real estate with limited cash. Regular people interested in real estate investing may be put off by the idea that real estate investing relies on huge cash reserves or access to capital. They may wonder how they are able to become an investor on a limited budget.
Enter Todd Hutcheson
A native Floridian, Todd has been an active investor in Florida real estate since 2001. His firm, ibuyhomes.com, is a nationally ranked wholesaling platform connecting buyers and sellers close on deals all over central Florida. Todd lends his wealth of experience to several investor resources, like real estate investors associations (REIAs). He is a current board member and president-elect of the Central Florida REIA.
He is helping people discover that getting into real estate with limited cash is doable through strategic marketing, networking and continuing education.
Getting Into Real Estate with Limited Cash
Wholesaling Done Different
Find motivated seller, put houses under contract, assign contract to investor
In a recent episode, we spoke with an investor who managed a Florida real estate portfolio from outside the country. This week’s episode features an investor who runs a foreign investment firm out of his home-base in Davenport, Florida.
Garrett Kenny started building his investment portfolio in Florida after being introduced to Orlando’s vacation markets in 1996. Since then, he has built his investment firm, Feltrim, into an international name for foreign investment in Florida real estate, handling all aspects of the investment process. This episode, Garrett discusses foreign investment in Florida and hot real estate sub-markets in Orlando.
Foreign Investing in Florida
Most foreign investors can expect to average 6% annual ROI
Easy to find financing options, but many do cash deals
Usually require more up-front from investor for financing
4-4.5% interest rates
Some foreign investors use local banks and mortgage brokers
Some financing may be available through institutions in home countries
Brazil and China emerging as dominant foreign investors in Florida markets
Foreign investors expanding portfolios in Florida real estate
62 million visitors to Orlando area in 2014
Diverse investment opportunity
Vacation rentals, commercial and industrial markets
Top 3 vacation rental areas – Championsgate, Davenport, and Kissimmee
Medical + Technology – Lake Nona
Long-term investing in 30 mi. radius of Disney
Other hot sub-markets
Distressed and repossessed homes
“Class A” properties – Windermere, Winter Park
Tips on Foreign Investment
Having a local knowledge of your desired market is key
Find out about the area before investing
Location, Location, Location
Finding the right location for your investment is important
To find out more about Garrett and Feltrim’s services or about investing in Orlando real estate, visit the firm’s website
Potential investors looking to get into the Florida real estate market are often held back by the fear that they don’t have the capability, time or resources to make the right investment decisions. There are a million reasons to say, “I can’t do it because…”
Our guest this week is Barney Killinger of Pro Auctions Services. Barney is a foreclosure auction expert, purchasing properties at foreclosure auctions for investors. His company, servicing mainly Central Florida, provides investors with a consolidated portfolio of foreclosure auction markets available for bid in several counties.
Barney is a great guest not only for his enormous well-spring of knowledge and experience in the Central Florida auction market but for his inspirational story. In 2010, Barney was involved in a head-on collision and suffered a severely fractured neck. While bed-ridden and amidst surgeries Barney continued to pursue his dream of achieving success in foreclosure auction markets and managed to organize and execute successful bids on 40 properties in a 45 day period from his hospital bed. Barney is living proof that you absolutely can succeed as an investor with perseverance and dedication.
Florida foreclosure market still going strong
Courts still holding and processing foreclosure cases
Large amounts of “reserve stock” properties
Most likely to reach its peak mid-2018
High Risk/High Reward
Risks can be minimized with right knowledge and resources
Returns on foreclosure auction investments
65-75% average for investors
12-15% average per month on remodel/rehab properties
3-6% average per month on wholesale flips
FL Open Bid system
Investors have access to bank/lender’s selling prices prior to sale
FL 10-day Title Redemption Law
10 days allotted post-sale for owner/borrower to pay liens or for bank/lender to vacate foreclosure sale
If sale vacated by bank, make direct offer to bank on vacated property
Pro Auctions Services
Servicing mainly Central Florida auction market: Polk, Orange, Osceola, Seminole and Volusia County
Proxy Drivers – view and photograph property for buyer at auction
Proxy Bidders – buyers who represent investor at auction
Tips for Success
Always SEE the property before placing bid
Run title search
Who you work with and how you educate yourself is very important in real estate investments
For more information on Barney’s company and the services they offer, visit his site here
Contact the Pro Auctions team by email at firstname.lastname@example.org