If you live in an area like I do (Denver), where property prices are high, but rents are fairly comparable to rents in other large metros, you’ve probably been wondering how you can get into this gold-mine you keep hearing about on the news… where property prices are so low. I wondered too. So I checked out a few areas around the country that had been much more depressed than my home area… areas like Nevada, Arizona, California and Florida. Because, after all, I want to buy in areas that were hot and will be hot again; but that have had significant price drops that I can use to my advantage.
Here’s what I found.
- Nevada’s major draw is legalized sin, basically – gambling and prostitution. It’s not really an area where I would be comfortable owning rental properties. After all, who is my renter going to be? An empty eyed gambling addict pulling at the handle of the slot machine hoping for the “big one?” Thanks, but no thanks.
- California’s prices are still crazy high compared to rents. Even the bad areas are still expensive. And the state itself is on the verge of bankruptcy. While it is an attractive area, I found too many fundamental problems for my risk tolerance.
- Arizona is a little too controversial right now with all the protests against their immigration law. And it was so overbuilt that there is an awful lot of inventory to clear out – a lot more inventory than there is population. I found that population there is dropping, which means that the rental markets there will be slower.
- In Florida, I found that it was overbuilt in certain areas, but that population is increasing, even amongst young 20somethings, who are a perfect group for renters. I found that although Florida has a high unemployment rate, companies are hiring there again. Disney is putting a brand new billion dollar project in place in Orlando.
So, I thought, now that I have it narrowed down to Orlando, how do I buy properties there safely? How do I know that these properties aren’t filled with mold, Chinese drywall, termites…. Or that the people selling them even own them? If I don’t have eyes on the ground, how do I protect myself from scam artists? Luckily, I know some people who happen to be investing in the Orlando area. I researched them and by the time I was done, I was so impressed that I decided to become a Director in the company.
Investors Alliance Asset Management Group, a division of HIS Real Estate Network, was formed specifically to take advantage of the phenomenal opportunities available in Orlando today, and to share these opportunities with other investors. We started with $5,000,000 to purchase properties directly from banks – and we purchase the properties in bulk. Our acquisition manager picks specific subdivisions that have fabulous amenities; subdivisions where you would like to live. While that is not often a criteria for rental properties, I like it that I can get affordable properties in very nice areas. After our acquisition manager purchases the properties, our construction crews get to work. They fix up each property to like-new condition. Once the properties are in excellent condition, we assign them to an expert property management company and they get the properties leased. Then, and only then, we offer select properties to our VIP buyers list.
Let me give you some real-life numbers so you can see for yourself what we are talking about:
One condo in a gated, resort-like community has 3 bedrooms and 2 bathrooms. It’s approximately 1260 square feet. In 2006, this condo sold for $432,000 – so yes, it has granite countertops, crown molding, etc. It’s a NICE place. It would cost $150,000 to rebuild and the current tax appraisal is $125,000. So, we bought the condo for about 10% of what it sold for in 2006, fixed it up, rented it out at $850 a month and sold it for $59,900. It’s cash-flowing for the investor from the day of closing. Now, we recommend that investors hold on to these properties for at least 3 to 5 years to take advantage of market recovery. And when a property is cash-flowing, how many properties can you afford to hold on to indefinitely? That’s right! As many as you can grab.
To find out more about our investments, check my website at www.christinamellott.com. On it, you will get immediate access to a free report about the Orlando Market. I would also like to invite you to an upcoming live 2 day training event and property bus tour! The first day, we will teach you how we manage our business and the second day, we will take you on a bus tour of our available properties, so you can meet us and see for yourself that we are the real deal.
I’d love to meet you in Orlando – come check us out.
Executive Director, Investors Alliance Asset Management Group