Orlando, Florida

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henry

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I have a chance to invest in an apartment complex in Florida - close to Disney World etc.

I would be buying off plans and the conditions are that I would need to pay in full immediately at a discount to the eventual sale price - mezzanine funding it is called. Price is $ 315K now with the sale price in 12 months time projected to be $ 386k.

The source is reputable but this would be my first investment and I am a bit wary. Has anyone any comments on this type of arrangement or indeed any comments on an Orlando investment.
 
Have you researched comparable properties in the local market? Have you good feel for the rental market? Do you understand the tax impacts?
 
'The source is reputable,' wrong. No one can predict the market value of a property in the future; the American market is on shaky ground. If your source is willing to provide a guarantee that the market value will be x in 12 months time backed up with a bond for the difference between your purchase price and the predicted price I’d entertain their opinion.




Orlando Sentinel
Vacation home sales have cooled
Four Corners rentals also down, experts say



The bubble hasn't burst, but let's say it's leaking," said Parkin, vice president of the Pegasus Group, a business and real-estate consulting firm that specializes in helping overseas investors, particularly those from the United Kingdom, relocate to the United States.


A year ago, a lottery or bidding war among U.K. buyers for a short-term rental vacation home was not unheard of. Sales, though, have plummeted in recent months in Polk County. Polk, which is rare in how it tracks short-term rentals as a zoning category, has 4,127 such homes owned by people from the United Kingdom.

Sales of such homes in Polk dropped more than 35 percent from September to October 2005, remained steady for another month before sinking again more than 48 percent from November to December.

Sales were 46 percent less in December 2005 than December 2004. Distribution of sales-tax money from the short-term rentals in Polk is down more than 13 percent comparing January with the same month a year ago, according to the latest reports
Click to expand...
 
I invested in florida last yr in a new development 'close to disney' - 10 mins drive. Mine was a straight forward transaction so I cant help you there.
Paying up 315k is alot of money and it will be a while before u get a RoI. In the meantime you will presumably be paying a mortgage thus eating in to your supposed profit.

There is a lot of paperwork involved with buying in florida, you will have to sign alot of legal docs. I presume you will also have to pay closing costs - which could run to 15k. Your mortgage rate as you are not US resident will be about 6.5%.You will also have to furnish the apt, another 15k at least depending on the number of bedrooms and the quality of decor you choose ( I can recommend a good interior indecorator - PM me). I would need more information in relation to the investment opp before I could give more exact figures.

How 'close' to disney is it? Disney itself is huge, I think there are about 4 or 5 exits from the motorway to get to Disney. There are a lot of investors in this region and I am having difficulty renting my property.

I have a lovely 4 bed condo for less than the price of a 2 bed flat in a small town. Which is appreciating at about 15% per yr ( apparently - no proof)

I agree with Rainyday - you need to do alot of research as there is alot of building in that area and you need to be sure that you are getting a good deal. If you plan on holding on to this for a couple of yrs, i presume you will want to rent it and this is a very competive market. Mgmt co & estate agents will say that they can get 100-150 a night for this and that, they can, but just for xmas and a few of weeks during the summer. Renters have so much choice in that area, you will have to hone your marketing skills just to make a return. I would suggest doing a google search on homes in florida and vacation homes to rent

if you were to buy off the plans for a normal development and it was to be completed at the same time you may find that this property may have the same % of increased value without the huge expense. You will have to pay 20-25% upfront in staged payments for a regular purchase.
 
We bought an apartment (off plans) in Orlando last March as an investment. Its 3miles from the Convention Centre and 2.4 miles from Disney. The apt. will be part of a resort and run like an hotel on nightly basis. We have paid the deposit from equity on our own home
here in Ireland and now we are wondering whether to fund the remaining
money the same way or get a mortgage in Florida

I know the interest rates are 6% and over in USA but I believe a lot of
expenses can be claimed against your tax over there. Using the equity
money we can not claim anything back.

Does anybody know what expenses can be written off aganst tax and if management fees are allowable. Our fees wll be 5.5% of the units gross rental revenue and we will have maintenance fees too obviously.
 
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