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Flipping houses is again a big business in Orlando
A few weeks ago, Carl Davis and Carrie Duvall got the keys to their newest flip, a 1950s ranch in the Mills 50 neighborhood they plan to put $200,000 into and hope to sell for a fat profit. It’ll take about eight months, and in that time they want to remove the aluminum siding, put on a new roof, build a pool in the backyard and add a second story.
“This will be our biggest project,” Davis said. And in a market like Orlando, where investment properties account for 15.1% of total home sales, they’re expecting it to pay off big time.
Orlando is currently one of the top markets in the United States for flipping projects, ranked No. 8 by Realtor.com. Miami also made the list at No. 3, as well as Tampa, at No. 4.
House-flipping is back across many parts of the U.S., with the economy recovered from the recession and housing crisis that began in 2008. The rate hit a nine-year high this summer, with 49,059 homes being flipped nationwide, making up 7.2% of total homes sold, according to Attom Data Solutions.
“It’s been a pretty steady increase in investor purchasing of properties. And it really hasn’t slowed down,” said John Murdock, a broker and founder of JMO Real Estate Group in Winter Park. “We’re basically seeing a little bit of everything right now. “We’re seeing a lot of the newbies doing flipping, we’re seeing people investing in longer-term investment strategies, and then I know a lot of people that are just sitting on the sidelines waiting because of the level of competition.”
George Ratiu, senior economist with Realtor.com, attributes the number of investment properties to Orlando’s strong economy. The unemployment rate is at 2.8%, a 13-year low; construction is booming; and home values continue to go up every month. Another big factor is the sheer number of people moving to the area, 1,500 every week.
Online services like Offerpad and Open Door are operating in full force in Orlando, and this week GrowthSpotter reported that a Miami-based boutique private equity investment firm will launch a $50 million fund to repair and resell foreclosed entry-level homes in Central Florida.
Still, flipping isn’t what it was after the housing crash a decade ago. “Back when the market fell and a bunch went into foreclosure, 2008-2010 in that time frame, we were telling people if you owned a house, buy another house because the market fell so dramatically,” said Jeffrey Fagan, president of the Orlando Regional Realtors Association. “If people had the means, that was a beautiful opportunity to own an investment property.”
Houses were priced so low, buyers could turn big profits. But now, as more people have gotten into the flipping business, and as home costs continue to increase and inventory shrinks, the profitability of fix and flips has dwindled. The median price for a home in Orlando is $250,000, and short sales and foreclosures, once a flipper’s bread and butter, make up less than 3% of sales.
An analysis released by Attom in September showed that investment properties in the U.S. netted $62,700 on average, an eight-year-low. In Orlando, flippers usually see a 41% difference in the purchase and selling prices, according to Realtor.com. “They have to be priced low enough for an investor to be able to make a profit,” Murdock said. “When you get into bidding wars, at some point, it becomes unprofitable.”
For Davis and Duvall, their new house, within walking distance from Ten10 Brewing and Santiago’s Bodega, will be their fourth flip. Unlike other investors, the houses they flip are their own homes. Davis works full-time at Orlando Health and Duvall as a broker. They work on one house at a time, living in them during construction and for a few years after renovations are completed. By living in the houses, they can avoid some of the taxes other flippers have to pay.
They bought their first property in 2010, near Lake Como Park, for $160,000, invested $75,000 in upgrades and sold it in 2015 for $299,900. The home they just moved from, on East Jersey Avenue in the SoDo neighborhood, was purchased for $135,000 in 2017, and after $110,644 of renovations sold for about $300,000 two years later.
“We kind of stepped back and said, ‘Wow, this is really supplementing our income,'” Duvall said. Lynn Thompson, a local investor in Ocoee, targets homes in and around the Orlando metro area that are priced below $200,000. Her latest acquisition was a $136,000 home in Lakeland that she sold for $172,000, clearing about $22,000 in profit. She also buys and holds houses, including about eight rental properties in Pine Hills. One cost $85,000, and after she put in about $15,000 in renovations has a current value of $140,000. Thompson, who works full-time at AdventHealth, has been flipping houses since 2007 and estimates she’s rented and sold about 80 properties since then. When she needs to, she borrows money from a close friend who’s a private lender but mostly rolls over profits from project to project. This year, she’ll make around $40,000 from her real estate properties.
“The gross numbers make it look like easy money, but (in one instance) I paid over $8,000 in fees to the title company, over $5,000 to the buyer’s real estate agent and $1,000 to a real estate attorney," said Thompson. “Shows featured on HGTV, for example, don’t usually mention these high fees. You have people coming in thinking it’s really easy.”
Evan Shelley, founder of Simple Sale Central Florida, said the flipping market has changed, moving away from the traditional cold-calling and door-knocking. More people are marketing their services and waiting for sellers to come to them. His business mostly targets distressed properties, ones that might have issues with titles, code violations, unpaid homeowners association fees or other problems. Most times, homeowners want to sell the house, and investors want to purchase to flip it, but those issues stand in the way.
One of his clients was going into foreclosure. The house was tax delinquent and had outstanding code violations. Once those were taken care of, Shelley found an investor to flip the property. “It was a win-win-win. The former owner started a new life out of the scare of foreclosure. I made money flipping it to the investor. The investor made money flipping it to a retail buyer,” he said. But if those issues hadn’t been cleaned up first, “they never would have touched it," Shelley said. Despite the success stories, Fagan warned against jumping into the flipping market to get rich quick. He advises people to hold on to properties and rent them out, and reap the rewards of appreciating real estate. “They grab a house and think they can slap some paint on it and put it back on the market and make a profit,” he said. “I’ve been in the real estate market a long time and real estate isn’t that way.”
Article by Caroline at email@example.com
DISNEY ROAD EXPANSION NEAR COMPLETION
Work on four major road projects at Walt Disney World - including an overpass over the Magic Kingdom parking toll plaza - should be complete by 2018.
The Reedy Creek Improvement District on Wednesday approved a $335 million package for the projects and provided a timeline.
A flyover bridge taking World Drive hotel traffic over the Magic Kingdom's toll plaza should be complete by the second half of 2018.
A reconfiguration of Osceola Parkway at Victory Way, southeast of Disney's Hollywood Studios and north of the ESPN Wide World of Sports Complex, should be finished by the end of 2018. A traditional intersection will be replaced with a flyover design similar to that at state roads 50 and 436 near Orlando. The flyover will take Osceola Parkway traffic over Victory Way.
NEW SUNRAIL STATION OPENS DOORS FOR PROPERTY OWNERS
Work has now been completed on a new SunRail station in Tupperware, Kissimmee, which is set to connect thousands of residents and workers with other local stations and amenities. As part of SunRail’s expansion into the South, the new downtown Kissimmee stop joins other stops including Meadow Woods, Orange County, and Poinciana, Osceola County. The new routes will cover 17 additional miles with a new schedule, adding to the 32 existing miles of track in the area.The expansion project began in April 2016 as SunRail branched out into the Osceola County area, and today will provide commuters with more mid-day time slots and later journeys at night, increasing its daily journeys by 11 per cent. Southern Florida residents will now be able to travel more easily to Orange County’s Sand Lake Road and Central Florida, in a move that has been praised by local officials. Osceola County Commissioner Vivian Janer said: “This means a lot whether you ride SunRail or not. It means a lot to the residents of Osceola County and more importantly the residents of Central Florida.” The new stations were welcomed with an official bell-ringing ceremony when they were opened at the end of July.
RESIDENTS OVERJOYED WITH THE NEW SERVICE
In a report from Click Orlando, residents and spokesmen for the Florida Department of Transportation (FDOT) expressed their happiness at the new connectivity and ease of commute in the mornings. FDOT spokesman Steve Olson said: “From this [Tupperware] station here, you can get to downtown Orlando in less than half an hour, and if you start from Poinciana, you can get to Church Street in 35 minutes. I challenge you on a weekday to do that on surface roads.” The move will bring about new opportunities for Southern Florida residents, who have become “dominated by cars” in recent years, which has grown year on year since the implementation of the federal highway system. In 2016, the region was ranked fifth worst in the nation for congestion, measuring at 8.7 per cent. The new SunRail development follows the construction of a high-speed railway in 2017, which will connect Orlando International Airport and other areas such as Fort Lauderdale. Back in Kissimmee, residents are excited to give the new SunRail lines a go. Local resident Judy Hardkick said: “This is wonderful. I’m going to use it to get around to places I don’t normally go.”
BETTER WORK DAYS FOR RESIDENTS
In a worrying report in May 2018, some Florida residents admitted to getting up at 4:30am to get into work, shower and begin their day. “If I do all that at home, then I’m stuck in the middle of the morning rush and it would take me two hours to get in.” This “morning rush” will now be a thing of the past for Kissimmee residents, bringing about new incentives for tenants looking to rent property in the area. Resident Joan Krupsky says that the new train line will turn her hour-long drive into an 18-minute train ride. With Orlando boasting the accolade of one of the nation’s top areas for job growth, these new connections will further employment opportunities and could attract new tenants for property owners. As one of the most densely populated regions in the country, Orlando becomes ever more challenging an area to move to, making the new rail connections even more prosperous for those in the Southern areas.
ORLANDO RENTAL HOMES IN SHORT SUPPLY
Metro Orlando recently ranked third nationally for its shortage of rentals that are affordable enough for the region’s lowest-income residents, a new study shows. Central Florida seniors, disabled residents and families working multiple low-wage jobs face the most daunting hunt for shelter, according to the National Low Income Housing Coalition’s annual GAP report. For every 100 of the lowest-income residents in Orange, Seminole, Lake and Osceola counties, only 18 houses were within their reach financially. Of the top 50 metro areas nationally, only Las Vegas and Los Angeles had a greater shortage than Orlando’s. Even pricier housing markets, such as Boston or Pittsburgh, had more affordable housing stock and support programs than Orlando. “There’s a combination of factors that make Orlando one of the worst in terms of shortages: lower-wage jobs, lack of older houses, and pressure on rental market to raise rents, which makes them less affordable,” said Andrew Aurand, vice president of research for the coalition.
The ranking measured residents who spent at least half of their income on housing last year. “These households forego healthy food or delay healthcare or medications to pay the rent,” the report stated. Affordable-housing shortages in Central Florida are expected to mount as Puerto Rican evacuees attempt to transport their federal Section 8 housing vouchers from their hurricane-ravaged island to the Orlando region. Orange County officials have placed 33 families from Puerto Rico into rentals using using federal vouchers; the county is working on placing at least 17 more households from Puerto Rico. Orlando housing needs are evident to Patricia Carter, director of the Life Center for the New Life Community Church in the Lockhart area of West Orange and Southwest Seminole counties. Many of the most affordable houses and apartments in the region aren't safe or fit for living, she said. "There is no middle in our housing anymore," said Carter, who plans a town hall meeting at the center on Thursday to hear residents’ concerns about housing and personal safety. "The low income isn't habitable and the high income isn't affordable."
Meanwhile, housing resources dwindle. At the federal level, President Trump has proposed further spending cuts aimed at extremely low income renters, the coalition reported. In Florida, lawmakers this year spent $185 million of funds earmarked for housing on other spending priorities, such as school safety. About $109 million of the money designated for affordable housing is being spent as intended. Jaimie Ross, president of the Florida Housing Coalition, said the Legislature must reverse its decade-old practice of raiding housing funds. Florida stands as a model for funding affordable housing with its tax on real estate sales but the Legislature is 'starving' housing programs intended to help residents with down payments or rental assistance, she said. The Orlando area is in particular need of help with incoming hurricane evacuees from Puerto Rico, she added. “The affordable housing shortage in Central Florida has been exacerbated year after year as the Florida Legislature appropriates Florida’s housing trust funds for uses having nothing to do with housing” Ross said.
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ORLANDO RENT INCREASE SECOND HIGHEST IN THE COUNTRY
Orlando is a beautiful place to live, but according to a new study, that's only for those who have enough money. The City Beautiful has some of the highest rent in the country, some experts say. According to a new study, Orlando ranked second in the country for increase in rent prices for one-bedroom apartments. Many people say they feel blocked out of the rental market. More than 1,000 new apartments have been built or are under construction in downtown Orlando, but it's tough to find one that's affordable. Christie McLennan is having to share an apartment with her mother. McLennan's boyfriend is still searching for something he can afford.
"It's pretty expensive. You compare it to other cities, like my friends living in New York spend less than I do," McLennan said. According to a study by the Harvard Joint Center for Housing, the median income for renters in metro Orlando is $35,000 and the midpoint rent price is $1,000. That means Orlando area renters are considered "rent burdened" because they spend more than 30 percent of their income on household costs. "Honestly, it's much cheaper to be a homeowner than to be a renter at this moment," said Luisa Clark, a local housing director at a nonprofit in Sanford. Clark helps people find housing. She said if they qualify, many of her clients are better off buying than renting because a mortgage on a starter house can be as low as $800 a month. That's less than the average current rent. "We have seen that a one-bedroom unit that used to be $500 to $600 is now at $900 to $1,200," Clark said. Clark and others wonder when the rent prices will level off. Until then, they said many renters have no choice but to live "rent burdened."
Local real-estate agents said the rapid rise in rental costs is not translating into an increase in home sales, even though buying may be more affordable. They said one reason is the majority of renting households don't have the savings or credit scores necessary to qualify for a mortgage.
Story by Amanda Ober - wesh.com
FLORIDIANS ON THE MOVE
New research from the AAA Consumer Pulse survey has revealed that 19 per cent of Floridians plan to move within the next 12 months. The survey was conducted among 1,606 participants, 202 of whom were Florida residents, between April 4 and April 27. The results were published on July 26. Participants also hailed from from Georgia, Illinois, Michigan, Minnesota, Indiana, Nebraska, North Dakota, Tennessee and Wisconsin. By comparison, 25 per cent of Michigan residents expressed an interest in moving within the next year, while just 13 per cent of Indiana locals had considered it.
ORLANDO RANKED #6
While the survey did not explicitly detail where these residents planned on moving to, it did reveal that just 17 per cent of the abovementioned Floridians planning to move were intent on leaving the state. Rather, the majority of those moving would be staying close to home, which could be explained by the results of a survey carried out by Penske Truck Rentals in early 2018. The results showed that Orlando recently ranked at no. 6 on the Top Moving Destinations List, maintaining its position from the previous year. Close by, Tampa and Sarasota came in at no. 5, beaten only by Houston, Dallas and Fort Worth, Phoenix, and Atlanta, which topped the list.
Orlando has proven time and again to be a popular moving destination, having gained 56,000 new residents in 2017 alone, making it no. 8 in the country for population growth. Since 2010, the area has grown by 17.6 per cent each year. So what is it that makes Orlando such a popular destination for new residents? It’s more than just Disneyworld: housing prices average a very reasonable $150,000 for a family home, with the rental and vacation markets showing increasingly positive signs of stability. Equally, living costs are just as much of an incentive – Florida is one of nine states with no state income tax, giving residents more disposable income to spend on those world-famous theme parks.
EMPLOYMENT AND RETIREMENT
Commuting has been made easier than ever thanks to relatively new developments such as SunRail and other commuter trains. There is no shortage of jobs in Orlando either; aside from the obvious vast tourism industry, Orlando is also home to technology giants such as Siemens and a variety of service-based companies. For retirees, Orlando houses several senior housing options for those aged 55 and up, while there is an ample choice of leisure activities from golf to hiking. Young ones are taken care of with a wealth of public colleges, universities and private liberal art schools. Recent figures also showed a 4 per cent reduction in crime, making Orlando a safe and pleasurable place to move to for the entire family.
MOVING FOR SUMMER
The AAA survey revealed that July to September was the most popular time of year to move, making Orlando the ideal destination for sunseekers. Despite premium rental truck prices at these times, 24 per cent of Floridians would consider moving during the summer months. As one of the most exciting economic periods since the global financial crisis, now is a fantastic time to move. With its growth potential and the diverse offerings for residents of all ages, Orlando is even better a destination.
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