VIEWS: 7 PAGES: 8 POSTED ON: 4/28/2010
Southwest Florida Bank Owned Duplex & SFR Investment Program Scott Allan, President AJA Holdings: (239) 872-5107 Direct www.TopPreconstructionMarket.com 11510 Longwater Chase Ct. Ft. Myers, FLA 33908 Real Estate Investor: Thank you for your interest in our SW Florida Bank Owned Property Program. We have been carefully monitoring SW Florida since 2003. SW Florida has experienced some of the greatest increase in housing value and has also experienced some of the most tremendous losses in value. This change has provided real estate investors a valuable opportunity to take advantage of repossessed housing for investment / income property. One major reason why Lee County was selected for this specific niche was because of the favorable population demographic going forward. Population forecast for the area for the period of 2008 through 2030 is expected to increase by over 400,000 people. Most of the increase is due to the Baby Boomer generation retiring to warm weather locations and the increase in population due to the expected economic upturn. Lee County is currently experiencing a stagnation in prices. We have not seen major value declinations recently and this is largely due to the fact that our housing inventory levels have dropped to 17.5 months, down from 33 months just a year ago March 1st. In November of 2008, over 920 homes sold. The following month in December, over 1,000 homes, not even to mention the pending sales. These sale numbers are an increase of nearly 400% from a year ago. Lee County is a Gulf Coast area. Its geographic location is the reason for the recent growth projections. Due to many homeowners walking away from their homes, these former homeowners are now forced to rent. Due to current economic times, most are moving into areas closer to numerous areas of industry. Eastern parts of the county have become very popular because of this. Located only 5 miles east of the Interstate 75 Junction, anyone in our targeted area can drive to a vast number of important locations. (See area map for driving times below). Lee County has done a remarkable job in the past of designating zoning restrictions which virtually eliminates unorthodox construction and trailer homes. Since 2002, most builders in the area have followed similar floorplans and exterior elevations. A unique, but tasteful blend of elevations has kept the integrity to real estate in these areas. Today’s rental market is experiencing a massive boost. Homeowners all over the state are making financial decisions to walk away from their homes they have bought in the past to avoid making payments on a house that is down over 45% in value. These former homeowners are bringing a nice balance to the rental market bringing quality tenants to our investor purchased duplexes. Our Property Management source has a 98% occupancy rate in our area and is at a 3 week timeframe from rent ready to fully occupied status. Management carefully screens all tenants, pulling credit and doing income/employment verifications. Monthly rental income checks are delivered or mailed to managements office where a check is mailed to you directly or can also have direct deposit arranged in bank to bank transfers (most popular). PM charges a one time $495 leasing fee per unit which covers screening and lease execution. Additionally, each additional month is an affordable 8%. All duplexes (2-family homes) & Single Family Residences we target are in specific Unit sections of the county. We follow a strict criteria looking for most potential value. All duplexes & SFR’s are built 2004 or newer and comply with the most updated code enforcements. No structure damage has been reported on any units we have visited and included. Included in the $75,000 price is an allowance of $2,000 for any backed taxes that may be due. Additionally, there is a $3,500 allowance for cosmetic, appliance, and/or equipment rehabilitation. It is clearly obvious that nobody can predict the bottom of the housing market. If we could, the U.S would be full of millionaires and billionaires. When CNN announces the bottom, we will already be on the way back up and savvy investors will already be in ownership position. Here is how we look at it. If we aren’t at bottom yet, we are very close to it. Banks recognize the sales volume picking up and they are holding onto their shorts tighter these days refusing for prices to drop further. Buyers are still buying which is creating the stagnation or “stand still” in prices. Let’s assume that the SW Florida housing market declines another 10% in value. Your $75,000 property takes a $7,500 loss in value. Just look at your cash flow numbers. Any potential loss in value is recaptured in rental income in a short period of time. Recommendation: Buy and Hold for 5 years. Southwest Florida Bank Owned Duplex & SFR Investment Program Scott Allan, President AJA Holdings: (239) 872-5107 Direct www.TopPreconstructionMarket.com 11510 Longwater Chase Ct. Ft. Myers, FLA 33908 Introduction: My name is Scott Allan. I grew up in Montclair, New Jersey where I also attended Montclair State University and was a 2-time All-American baseball player. I furthered my baseball career playing for the New Jersey Jackals, an independent league professional baseball team in none other than Montclair, NJ. After bouncing around spring training with the Boston Red Sox and NY Mets I decided to take up real estate in Lee County, Florida, the site of my off-season training programs. I am currently a licensed real estate agent in Florida and New Jersey. In 2004, I assisted a major developer in achieving land entitlements to a 35 acre property on the Gulf of Mexico, something that had been turned down since 1990 by the state of Florida. I made a case to the Armed Corp of Engineers to allow up to 120 boat slips on the back intercoastal waterway, 40 single family homesites, and marina facilities. I was immediately recognized by TFS, one of the largest privately held construction lenders in the country where I was hired as Director to their subsidiary real estate brokerage. In 2007, I became a partner in a construction company where we built over 50 duplexes catered to displaced homeowners in different counties in coastal Mississippi, some of the hardest hit areas by Hurricane Katrina. In 2008, I started a private fund with the intentions of providing mezzanine financing for good projects gone bad during these tough economic times. My training, learning, and hands on experience with every aspect of real estate gives me unique knowledge on acquisition, creative finance structure, Value, and construction. I have recently launched a highly visible campaign in Northern New Jersey called New Jersey Real Estate Guys. Our NJ division assists in buying/selling/investment by using a blend of highly experienced agents and state of the art internet and media marketing. Our office is located off of Pier A in Hoboken, New Jersey. Back to Florida: After monitoring the market tremendously in SW Florida for the last 2 years, I firmly believe that now is a great time for real estate investors to capitalize. When I see buying opportunities at $22 per square foot including the land, it is only modest to say that this is the time. My personal opinion of real estate and where prices are heading in Southwest Florida: The government will do anything they can to stabilize the housing industry, whether you believe in the solution or not. A huge part of the national industry relies on construction and infrastructure. Without them, our middle class will suffer, and it is the middle class that is the rock of our economy. Values must get back to at least the replacement cost of the property to trigger development. Excluding the land of course, a duplex in Florida costs a builder without profit $145,000+ to build similar duplexes to what we are buying now for $75,000. Whether it be 5 years from now, or even 10 years from now when we see prices like that, I know my investment into the property will bring me a higher rate of return than any other investment opportunity there is today backed by my belief in housing recovery. Those who hold IRA accounts, there is no reason why you should not consider investing your IRA into real estate, especially today. Look at the cash flow analysis on income property, and then look at your IRA statements from the most recent year. Enough said. I look forward to working with you and assisting in expanding your wealth portfolio. Professionally Yours, Scott Allan President AJA Holdings Southwest Florida Bank Owned Duplex & SFR Investment Program Scott Allan, President AJA Holdings: (239) 872-5107 Direct www.TopPreconstructionMarket.com 11510 Longwater Chase Ct. Ft. Myers, FLA 33908 Member of NAR, FREC, NJREC This duplex was built in 2005. We bought this in January 2009 and this is exactly what it looked like when we bought it “As-Is” which are standard terms when buying REO property. The grass can be brought back to a lively green during the rainy season or by irrigation. (I don’t have a current picture today of this exact one). We bordered the driveway with railroad ties, and threw down sod seed to bring back color to the lawn the quickest. We also extracted the shrubs along the front of the duplex and re-planted hardy shrubbery and planted a nice triple-palm in the front. This is one of our first duplexes (built 2006). We finished in January, the start of our program. This was a personal investment. I re-sodded the front lawn and put in some shrubbery where condusive. We power-washed the house using a third party company. This type of cosmetic repair would be a little bit more, likely pushing you toward $80,000. We ripped out the carpeting and layed ceramic tile throughout the interior. Our only interest is construction post 2004 as that will ensure you are up to the most recent code enforcements. All duplexes are built using CBS Construction (Concrete Block & Steel, Stucco Exterior) Southwest Florida Bank Owned Duplex & SFR Investment Program Scott Allan, President AJA Holdings: (239) 872-5107 Direct www.TopPreconstructionMarket.com 11510 Longwater Chase Ct. Ft. Myers, FLA 33908 Pictured is the back of a duplex. Most have back sliding doors for backyard access. Lots measure approximately 100’ street-front and 120’ deep. This duplex needs only minor landscaping. This is what your typical duplex will look like in the back. We do not recommend getting fancy back here. Tenants don’t care. I would plant maybe a tree or two a year before you plan to sell to spruce it up a bit, otherwise we would leave alone. Pictured is the bedroom (1 of 3 per side) at the front of the unit. We replaced the floor with earth-tone ceramic tile. Cost to re-tile entire floor surface in both units of the duplex: $7,500 to $8,000. It is a good option to use as you don’t have to worry about carpet cleaning or replacement for the life of your ownership. Double bi-fold closet. Secondary and Third bedrooms dimensions are roughly 10’ x 11’ not including closet. Southwest Florida Bank Owned Duplex & SFR Investment Program Scott Allan, President AJA Holdings: (239) 872-5107 Direct www.TopPreconstructionMarket.com 11510 Longwater Chase Ct. Ft. Myers, FLA 33908 Each duplex half comes with 2 full bathrooms. Standard specifications include tub/shower combo, formica countertops, vanity mirror, linen closet. Standard kitchen. Formica countertops, white appliances include fridge/freezer combo, electric range (not shown), dishwasher. Plenty of cabinet space. Breakfast bar allows countertop eating space. Picture taken from middle of the living room. You can’t notice in this picture, but this duplex has cathedral ceilings. Most duplexes built post 2004 have cathedral ceilings. Southwest Florida Bank Owned Duplex & SFR Investment Program Scott Allan, President AJA Holdings: (239) 872-5107 Direct www.TopPreconstructionMarket.com 11510 Longwater Chase Ct. Ft. Myers, FLA 33908 See area map below or download attachment to this e-mail. If this has been mailed to you, see separate piece. Southwest Florida Bank Owned Duplex & SFR Investment Program Scott Allan, President AJA Holdings: (239) 872-5107 Direct www.TopPreconstructionMarket.com 11510 Longwater Chase Ct. Ft. Myers, FLA 33908 Single Family Homes in Lee County, FLA are situated on platted lots of approximately 10,000 square feet or 85 ft along streetfront and 100-125’ deed. As shown in picture above, this home was purchased for $65,000 and required $2,000 of lawn maintenance and $5,500 of interior cosmetic repair. For the lawn, we reconnected the underground irrigation system, watered, and fertilized over a 3 week period. Additionally, shrubbery along the front of the home was overgrown. Shrubs were extracted and replaced with hardy heat resistant shrubs which will grow into a nice 2 ft. hedge, creating nice decorative landscaping. On the interior, a fresh coat of paint was applied and carpeting was ripped out and replaced with 12 inch ceramic tile. This home has a Broker Price Opinion (BPO) of about 95,000, which in current real estate terms is just as equivalent to current market value. Homes just like the one pictured above were built for $240,000 to $320,000 and are being sold at pennies on the dollar from original purchase price and over 20% under BPO value, something incredibly tough to do in today’s housing market. Purchasing a bank owned or repossessed home has many benefits including buying into an equitable position put in place by a reputable and knowledgable team of real estate experts. This home could make a perfect acquisition for an income investment property or a second home, where on the same type of purchase may be rented seasonally for the allotted time that you are not occupying the home for approximately $900 per month. Homes purchased are the same or similar to the home pictured above. Typical floorplans include 1500 sq. ft. of living space (not including garage, patio, entry) 3 bedrooms and 2 full bathrooms. A complete set of appliances is included in the home including washer/dryer. Southwest Florida Bank Owned Duplex & SFR Investment Program Scott Allan, President AJA Holdings: (239) 872-5107 Direct www.TopPreconstructionMarket.com 11510 Longwater Chase Ct. Ft. Myers, FLA 33908 See complete video of homes at www.TopPreconstructionMarket.com . Average Prices: Lee County is divided into numerous cities including Fort Myers, Cape Coral, Lehigh Acres, Sanibel & Captiva Island, etc. Our targeted are for single family homes are Lehigh Acres and Cape Coral. Naturally, Cape Coral has higher values due to its peninsula location and convenience to intercoastal waterways. Repossessed home investing is a great value in both cities and differs on price by nearly 30%. In Cape Coral, the average turn-key price of a single family home is $75,000 to $80,000 in the south part of the city, which is your intercoastal territory. In the north part of Cape, homes start in the $50,000 range and climb in the low $60,000’s. Locations are just as convenient, however in the north part of the Cape city water lines are not accessible, therefore well systems are the norm. In Lehigh Acres, a landlocked city, only 15 miles from the beaches, well systems are the norm also, however prices start considerable lower in the upper $40,000’s to low $50,000. Note: Well systems are preferred by much of the demographic and consists of a 50% popularity among homeowners. Although not a deterrent for homeowner purchase and tenant leasing, there will be a future assessment of about $6,500 in the next 5-7 years when water infrastructure is extended. Duplexes or 2 Family Homes are available predominately in Lehigh Acres. Lehigh Acres was appropriately zoned to maintain a quality bedroom community. Two Family duplexes are becoming increasingly popular due to its low overhead, and lesser cost of living expenses. From an investment standpoint, 2 family duplexes provide a higher Net Operating Income, however single family homes have historically increased in value greater than duplexes, although not by much. Almost every 2 family home is separately metered and code enforcements will normally allow homeowners or investors the capability to condo convert the 2 family home into separate sellable condominiums. This is a HUGE equity advantage in the homes. Typically a real estate attorney will charge $4,000 to perform this process which includes months of work, condo documents, and legal representation. Our turn key system provides all necessary components to this including real estate professionals, tax professionals, finance professionals, builders, property managers, and attorneys. We look forward to hearing from you. Once again, please visit www.TopPreconstructionMarket.com to view intimate videos performed inside some of our 2 family duplexes and single family homes. Conservative Rental Rates for single family homes in Cape Coral are $850 per month on comparable homes. Conservative Rental Rates for Single family homes in Lehigh Acres are $700 per month on comparable homes. Conservative Rental Rates for DUPLEX 2 family homes in Lehigh Acres are $1,300 total.
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