Latest / Financial Survival Network / Florida Real Estate is Still Booming -- Jim Sheils #5845

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Florida Real Estate is Still Booming -- Jim Sheils #5845 · Financial Survival Network

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  I believe in all our areas, Carrie, Southwest Florida. You know the
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  greater Fort Myers area that was really hot. It was the fastest growing area
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  in the country last year ranked. But I think you know, part of
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  me really likes Jacksonville. You're listening to Carrie Letts's Financial Survival Network, where
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  you get valuable information. You just can't find anywhere else to thrive in today's
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  trying times. You need the Financial Survival Network now more than ever. Go
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  to Financial Survival Network dot com and get your free newsletter in gift Financial Survival
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  Network now more than ever, and welcome. You are listening to watching the
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  Financial Survival Network. I'm your host, Carrie lets Well. You hear about
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  real estate busts taking place around the country, but there is there are several
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  places where that just is not the case, one of which is the Great
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  State of Florida. My adopted home and the adopted a home of the person
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  you're about to hear from, Jim Shields. I've known you for years now.
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  You've literally been at this NonStop. I think I've known you five or
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  six years. You've been building homes in the Jacksonville market and selling them to
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  investors through thick and thin. How is business? Business is good. We're
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  actually now in twelve different markets in Florida. So we've expanded the new construction
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  model. You know, I used to do both foreclosures, buy foreclosures,
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  fix them up, rent them, or work with investors on them. And
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  we just found the new construction to be a better way, and it was
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  also more scalable and more desirable for everyone for the for our own building needs,
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  for investors, for the tenants. So we've been able to scale into
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  about twelve different markets now. All right, So you have a really good
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  perspective, a unique perspective on the Florida market. Like I said in the
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  intro, there's weak real estate markets around the country, but Florida is not
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  one of them. What is your take, what's your perspective on what the
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  market's doing and where you think it's heading. You know, right now in
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  Florida, supplying demand is a big factor of all real estate, and we're
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  still behind on building for the people that have been coming here through the pandemic.
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  So we're still seeing nothing like the growth that you saw of twenty thirty
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  percent and values and rental growth in like twenty twenty one, but still ticking
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  up a few percent already this year. And we're very conservative at our growth
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  patterns, so we're still seeing a very small uptick in both rents and growth
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  our year over on rental contracts if you do a new rental contract, we're
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  having about nine point six percent increase on our rents, and this year so
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  far, the market's average about three percent growth midway through the year. So
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  Florida's fascinating state. Do you know how many people that were in Florida in
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  nineteen fifty A lot less than now two point seven million. You know what
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  the population was in the nineteen sixty four point nine million. Yes, now
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  it's twenty two and a half a million. It's probably higher than that.
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  I don't think Census really has the key metrics programmed in. So in a
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  market where you have rising population, even in the face of rising interest rates,
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  prices still go up. Yeah, absolutely right. So a house that
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  you sold to an investor a year ago, how much what was the average
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  price you were selling for a year ago? You know, a year ago
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  wouldn't be a ton different from now, probably about eight percent less a year
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  ago, you know, now to three years ago thirty percent less, right,
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  nice climb for our investors. They've been very happy. Yeah, so
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  eight percent effectively. I mean, I realize it's paper gain from one year
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  to the next. It's not a real gain until you go to sell.
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  But that's got to give you some some incentive, some security when you're going
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  into a market where you hear the media just saying, you know, can't
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  get mortgages, mortgage rates are so high, all of this. Yeah,
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  well, we've tried to create our own market for our investors. So one
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  of the major things that does influence no matter what anyone says, is interest
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  rates, because it affects your payment, whether you're an investor trying to get
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  cash flow or a homeowner wanting to lig there. So what we've done for
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  our new constructions, we've created an in house financing program, locking people in
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  at four point seven five percent, which obviously helps with immediate cash flow when
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  when others are out there offering about seven percent for investor loans, we're trying
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  to get them off on the right tra You have to have a certain size
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  company I'm balance sheet to be able to do this with banks, but we've
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  been lucky to cross that threshold, and now we're able to offer these low
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  rates to our buyers. So what's your typical house that you you sell to
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  investors? Well, you know, typicals a tough word carry because you know,
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  our our recipe is all residential right now, single family duplexes and quads,
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  um and and that's our main focus. Those range from about two forty
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  two about heat hundred and yeah, So what what kind of rent can you
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  get on these homes? Uh, we're looking at anywhere from you know,
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  fifteen hundred to twenty two hundred or for smaller units twelve hundred to sixteen hundred.
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  So I would classify that almost as an affordable housing on the small.
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  Oh yeah, we're definitely in the workforce affordable housing price below the medium you
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  know. And and I'll none of the big builders out there will build duplexes
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  or quads. They have no interest. No, no, so less than
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  I think it's less than eight percent. Since two thousand and nine of new
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  construction has been for units under twelve hundred square feet. Twelve hundred square feet
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  are underd So when we step in with one of our duplex models or quads,
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  it's an affordable housing and not a large apartment that people are really attracted
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  to, and that's been to our advantage because a lot of people just don't
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  want to build them. We don't mind building them, and the returns are
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  great for our investors. I can see that. And I know just in
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  my area, Palm Beach County, very little you know, multi multi unit
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  housing is like you know, basically town homes that are going for like,
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  you know, a million dollars. Yeah, that's what they're going for here.
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  You know, you see, the high end builders are involved in that
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  space, but in terms of middle class housing, there just isn't any really
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  being constructed here in Florida unless they're in areas that are transitioning. You know.
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  Yeah, yeah, my m like for that that southeast side of Florida,
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  it's just too expensive. Beautiful, it's a great place to live,
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  as you know, uh, you know, the Miami Palm Beach for Lauderdale,
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  it's just been too expensive. The numbers don't work. So that's why
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  we're more up in Jacksonville, O'calla areas of southwest Florida. You know,
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  several markets down there. Those just have a little different fundamentals for the investors
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  side, and still great lifestyles. Maybe not as nice as Palm Beach or
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  or Emmy if that's what people want, but still a great lifestyle. Florida
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  is Floriday of your twelve markets, is there a standout where things are really
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  happening quickly and you know, just a total panic to move to that area?
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  You know. I believe in all our areas Kerry, Southwest Florida,
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  you know, the greater Fort Myers area that was really hot. It was
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  the fastest growing area in the country last year ranked. But I think,
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  you know, part of me really likes Jacksonville. That's that was our hub
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  market, That's where we started, you know, and I'm just seeing some
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  real exciting approvals come through finally in Jacksonville where we need housing, you know,
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  and in good areas we're finally getting more quads approved, which you know,
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  investors love our quads, their uniform unicorns, I call them, because
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  they're harder to find, especially new construction. They're hard to get approved,
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  but they produced a great cash flow. So so probably Jacksonville's the one I'm
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  I'm most excited about right now. Any of your buyers actually taking one of
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  those quad units for themselves and just letting the tenants finance their home pay for
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  their home. We've had a few people all our occupy h and living a
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  unit and then rent the other three, which is not a bad strategy for
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  people to start off on. Yeah, especially you're young in your twenties,
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  early thirties. It's it's your ticket to building wealth, rif exactly exactly.
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  Yeah, So you've been doing this for like a lot of years here,
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  Like, I don't think me four years been the new construction game about ten
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  years now. I hung up my rehab shoes, you know, about nine
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  years ago. So as far as cost inflation, as far as finding qualified
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  contractors and laborers, that's gotten a lot tougher. It wasn't it a lot
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  tougher. But we are you know, a team of one hundred and seventy
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  so we have a good sized team. We've also really entrenched in the markets
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  where we're not as big as the nationals, but we've been building through the
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  pandemic and so we've established some pretty good trade routes with both you know,
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  our subs and materials, which helps everyone involves, right, and luckily the
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  price of lumber has dipped dramatically from its peak it's come down quite a bit.
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  Still not where we were in twenty nineteen, you know, a normal
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  market, but definitely a lot better than where it was at end of twenty
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  twenty. So, if you're an investor and you're looking to take your first
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  step into this market, what is your key piece of advice to that person?
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  You know, I would look for the long term people. My best
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  advice to people carrying I'm owned hundreds of properties. If I had to go
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  back and do something different, I would own less of better quality and better
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  areas period. And the story because the cheapes with deferred maintenance can seem like
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  a great strategy and the look, I've owned them, but there is more
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  involvement. There is maintenance and more maintenance for repairs, more turnover, and
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  I would I have now in my more wise years, I'm hoping I've learned.
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  I own a lot less property than I used to, but they're much
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  better quality and they produce a way better cash flow and way more equity than
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  when I had more to deal with. So I tell people, you know,
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  it's not the amount of properties you own, it's the quality of each
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  property you do own, And that's my best in so quality not quantity.
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  Yeah. Also, when you're talking quality, you get better quality tenants.
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  Right, So better quality tenants means less maintenance means less headaches, right exactly,
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  sir? All right, well, hey tell us where do we find
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  you, how do we contact you? How do we follow you on the
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  internet. Yeah, if you want to learn more about kind of our fundamentals
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  and principles, my wife and I designed something called the JJ Playbook. You
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  can go to JJ playbook dot com. That's going to talk about our buildret
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  model and kind of our journey over the last twenty four years. How did
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  we create our passive income to support our lifestyle? And then some and then
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  Southern Impression Homes is our building company, and we're in most major markets in
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  Florida, like we talked about, And that's a great starting point. If
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  you're wanting to get more involved, all you have to do is go through
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  JJ playbook dot com and set up a discovery call with one of our sales
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  specialists. All right, hey, reallysting times. It shows that real estate
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  is in fact local, and you've got hundreds of local markets and they're not
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  all created equal. If you've got for Jim or myself, shoot me an
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  email kl at carry Lutz dot com. You'll find the links in the show
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  notes this interview on Financial Survival Network dot com. Just click through, and
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  while you're there, sign up for your free newsletter Jim. Always a pleasure.
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  Thanks for stopping by. Let's seeing you carry Thank you, Thanks for
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  listening to carry Lutz's Financial Survival Network, your solution to today's trying times.
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  For the latest, go to Financial Survival Network dot com. Financial Survival Network
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  now more than ever,