Ep 193 - Growing Your Portfolio with 4.75% Interest Rates on New Builds in Fast Growing Florida Markets
Sep 11, 2023
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Discover the advantages of investing in new construction homes in Florida, including resilience to hurricanes and lower maintenance costs. Explore creative financing options and opportunities for positive cash flow and potential appreciation in these properties. Learn about the real estate markets they serve, construction challenges during the pandemic, and the different potential for appreciation and cash flow. Also, explore the warranty offered on new builds and the importance of communication between property managers and builders.
Investing in areas with growth potential and strong cash flow can expedite returns through appreciation and rent growth.
Florida is a prime location for real estate investment due to its rapid growth, affordability, and business-friendly environment.
Working with a build-to-rent builder offers investors a tailored approach, diversification options, and long-term equity growth in the Florida market.
Deep dives
Build to Rent Model and the Advantages for Investors
The podcast episode discusses the build to rent model and highlights the advantages it offers for investors. Build to rent is a business model that caters specifically to investors, focusing on areas where cash flow numbers make sense and rental demand is strong. The builder, in this case, has the investor's goals in mind, building in areas with growth potential and affordable buy-ins. The builder's menu includes single-family homes, duplexes, and quads, allowing investors to diversify their portfolios. Working with a build to rent builder like the one featured in the podcast ensures that the construction is designed for the long-term rental market, incorporating durability, tenant-friendly features, and suitable warranties to minimize maintenance and repairs. Overall, the build to rent model offers investors the opportunity to invest in areas with growth potential, strong cash flow, and long-term equity growth.
Florida as a Prime Location for Real Estate Investment
The podcast episode focuses on Florida as a prime state for real estate investment. Florida is currently the fastest-growing state in the nation, attracting people from various regions due to factors such as warm weather, affordability, and business-friendly environment. The state's growth patterns had already begun prior to the COVID-19 pandemic, driven by factors like population influx, desirable amenities, and job opportunities. The episode highlights several markets in Florida, including Jacksonville, Palm Coast, Ocala, and Southwest Florida, each offering unique advantages for investors. Florida's affordability index, population growth, economic growth, desirability, and supply and demand dynamics make it an attractive location for real estate investment. The episode also mentions the availability of financing options to aid investors in achieving their goals.
Understanding the Florida Real Estate Market
The podcast episode provides insights into the Florida real estate market and addresses common questions and concerns. The discussion emphasizes that Florida's growth is not solely due to COVID-related migration but is driven by long-term factors such as warm weather, affordable housing, no state income tax, and a business-friendly environment. The episode touches on the continuous population growth in Florida, with thousands of people moving to the state daily. Different markets within Florida are highlighted, including their unique characteristics and growth potential. The episode also addresses concerns about bubbles and timing the market, emphasizing the ongoing inventory issue in the US and the importance of getting ahead of price increases and interest rate changes. Additionally, the episode mentions the availability of warranty options for the properties, ensuring investor protection and peace of mind.
Advantages of Working with a Build-to-Rent Builder
The podcast episode discusses the advantages of working with a build-to-rent builder for real estate investors. Unlike national builders that prioritize retail sales, build-to-rent builders focus on catering to investor needs and goals. They offer options like single-family homes, duplexes, and quads, providing investors with a diverse menu to build their portfolios. These builders prioritize affordability, durability, and tenant-friendly features to ensure long-term success and minimize maintenance costs. They also have warranties in place to cover construction-related issues, providing investors with added protection. By working with a build-to-rent builder, investors can benefit from specialized expertise, lower margins, and a tailored approach that aligns with their investment strategies.
Considering Cash Flow and Appreciation in Florida Markets
The podcast episode touches on the importance of considering cash flow and appreciation in different markets within Florida. The discussion highlights the various markets available, ranging from more affordable areas with higher cash flow potential to higher-priced markets with potential for greater equity growth. Factors such as rental demand, job opportunities, affordability, and desirability are critical indicators when assessing cash flow and appreciation potential in each market. The build-to-rent builder offers a range of property options, including single-family homes, duplexes, and quads, allowing investors to choose the investment strategy that aligns with their goals. The episode also emphasizes the importance of looking beyond year one analysis and considering long-term trends, such as rental growth and market appreciation, when evaluating investment performance.
Being in the path of progress is the way to expedite your returns through significant appreciation and rent growth (while still being positive cash flow day 1). One of the best places to do that today is in the southeast, and specifically in Florida.
Adam Schroeder and Zach Lemaster talk with their boots on the ground builder in Florida about what markets they are building in (and why), what the driving factor is behind all the movement, and long term prospects of the area as you continue to grow your portfolio.