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[00:00] welcome back today I want to tell you why I think these are the top three ways to invest in real estate at least in the Tampa [Music] area the market has changed a lot over the last 10 years some people think that bur is the best way others like those
[00:17] easy passive consistent long-term rentals some like the secondary benefits of Airbnb and I think you know each of these have and others really have had their moments to shine but what is looking good for 2024 here's my opinion all right number one is pad split I know I know I know I've talked about this a
[00:33] lot in other videos sorry if you've already seen them all but I am going to do it again so padsplit is a unique housing platform offering affordable room rentals primarily on a weekly basis um but these are longer term stays they're just paying on a weekly basis founded in 2017 by attakus LeBlanc IT
[00:52] addresses the most affordable housing crisis by converting properties into shared Living Spaces or co-living unlike Airbnb which focuses on a short short-term rentals pad split is about long-term affordability and Community Centric living how does pad split work right it they operate by trading
[01:07] properties into individual rooms for rent it starts with property owners uh listing their spaces on the platform kind of like Airbnb these are then rented out to members the renters who undergo a screening process for safety and the model offers a stable income stream for property owners and an
[01:24] affordable living solution for renters what are the benefits for owners for property owners Pat split offers several enticing benefits by converting underutilized spaces into additional bedrooms you can significantly boost your property's income potential now padsplit offers um pad split handles
[01:42] tenant screening and rink collection reducing the hassle for owners for tenants the appeal lies in affordability and simplicity the allinclusive bills covering rent and utilities pad split's Mission um is to alleviate and to alleviate the unaffordable housing crisis right so it provides Housing
[02:01] Solutions for individuals typically earning less than 35,000 annually such as essential workers who can't afford High rental costs by Saving on these monthly expenses the idea is that rent residents can improve their credit histories and work towards Financial stability um despite its benefits
[02:18] padsplit hasn't been without controversy there have been concerns about the systems lack of Regulation and the ethical implications of working inside you know legal loopholes this highlights the need for prospective padsplit operators to thoroughly understand the local laws and regulations wherever they
[02:34] live um so you know Houston's going to be different than Atlanta Georgia which is where their headquartered which is different from Tampa um but they're growing rapidly because you know this Innovative approach to tackling the UNA the affordable housing crisis offers a win-win solution the owners Property
[02:49] Owners get a higher rate of return on investment and renters get an affordable place to stay with you know High occupancy rates and the and the promise of stable long-term income it's becoming an attractive investment model in various cities across Florida Georgia Texas and in others Mississippi um I
[03:09] know who talks about Mississippi padsplit represents a novel approach in the real estate market combining social responsibility with financial opportunity so whether you're a property owner looking to maximize returns or a tenant seeking affordable living options pit offers solutions that are worth
[03:26] considering and uh that's that's all for the so number two the second option I recommend going to going into uh 2024 being strong is flipping and it needs no introduction this method needs no introduction everybody's heard of it everybody knows about it but I'll give it one anyway what is house flipping
[03:44] house flipping is all about buying properties renovating them and selling for a profit it's a strategy that has gained massive popularity you know partly in things to those captivating TV shows HGTV uh chi and Joanna gains but it's more than just a trend in 2023 house
[04:01] flips accounted for 9% of home sales up from 5.7% in 2017 the financial the the financial upside to house flipping the potential for profit here is significant um although there was a decline in the average gross flipping profit in recent years the trend is improving as of the first quarter of 2023 the average gross
[04:24] profit on house flips was uh 56,000 with an Roi of 20 2.5% um the cost of flipping can vary but a rule of thumb is to anticipate spending about 10% of the home's purchase price you know factor that in for 10% of the purchase price for uh uh flipping expenses with holding cost so
[04:44] that's you know uh legal title closing costs not renovation costs renovation cost is going to vary even more and so you're going to you know you can the cheaper the property typically the more the renovation costs so in Tampa a $150,000 property could be easily 100K or more of work it could be even a tear
[05:03] down um but you know maybe your more expensive properties closer to what the the average sales price is is going to require less work you know maybe it's 20 $30,000 of Cosmetics so that's not promising that you know house flipping is your solution and it's you know it's not without its
[05:19] challenges um Market fluctuations High Rising interest rates and inventory limitations are significant hurdles um they were in 2023 but increased costs due to a shortage of building materials and labor surges added to the financial burden um so
[05:37] properties also of this year have been taking longer to sell requiring flippers to adjust their strategies and timelines however in 2024 I do predict if rates go down somewhat to where we think they're going to go down in 2024 I think there's significant opportunity to even even looking for a property now and the
[05:56] reason is that when rates go down if you're buying now you can get a significant reduction or seller credit or both that's just that's just the market that we're in right now this is the end of 2023 when rates start to go down we all know you've heard it many times before a
[06:11] million times on social media that the housing prices are going to go up as the rates come down so that's going to be a nice Tailwind for Flippers going into next year of course that's assuming that we know rates are going to come down even slightly so that is one reason why I think looking at a property to flip um
[06:30] from now until the early parts of 2024 um is definitely going to be hopefully I'm bullish on it a little bit better than normal the Third Way the third method is subject two uh and we've heard a lot about this recently it's all over social media everybody's advertising it what is subject two subject two a deal
[06:49] involves buying a property subject to its existing mortgage so this means that instead of the homeowner paying off the mortgage the buyer takes over the mortgage pay payment however however the loan remains in the seller's name while the buyer gains the title to the property so it's a strategy that allows
[07:07] buyers to acquire properties without needing to qualify for a new loan sounds powerful now there's advantages to that subject to investing offers several benefits it's ideal for buyers with limited credit or cash as it requires a seller or sorry it requires a smaller initial investment for a potentially
[07:26] larger return it also cuts down the on transaction cost by avoiding traditional financing channels uh no points for example with lenders right now for sellers especially those facing foreclosure or needing immediate immediate cash it provides excuse me provides a quick solution and for
[07:44] lenders timely mortgage payments mean avoiding foreclosures so how do you find a subject to deal they're not all over the place sometimes you have to look for them but they're getting more attention and more people are are there's just more education out there right now which is great so to find subject to Deals
[08:01] look for Motivated sellers such as those behind on payments or in foreclosure properties in distress or needing repairs also can present opportunities but by finding a I'm Sorry by offering a subject to contract investors can provide an attractive solution to those sellers urgent problems so nothing is
[08:18] without risks despite all those advantages subject to investing isn't without like the property remains in the seller's legal liability so the properties the seller's legal liability even after the deal is done that means that their financial commitments remain to the loan if the seller faces
[08:36] bankruptcy the property could be at risk um additionally failing to make payments can harm the seller's credit score and there's the do on sale Clause to consider which you know may or may not have um may or may not be present sorry and it's rarely enforced too so all that
[08:54] stuff is stuff you have to consider some tips for Success here um and and granted I haven't done a whole lot of these but there are those who have hire a real estate attorney to navigate the legal aspects and ensure compliance with your state specific laws that's like number one research the loan terms thoroughly
[09:12] uh including Clauses that might affect your investment here the Dual and sale Clause is one of them conduct a detailed analysis of the investment property like you should with any property and number four estimate renovation costs uh and potential return if selling or rental and common expenses of renting out so
[09:29] these have been my my three kind of go-tos for going into 2024 I hope you found some value out of them please consider subscribing to the channel if you want to hear more about what we do here in Tampa Bay with the uh the investment side
