Expert: Ricardo (Rick) Fornos C.R.B. - 2/7/2005

Question
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Followup To
Question - Rick after visiting Port St Lucie and seeing that the new homes in the area are going for 230,000 to 260,000 we could have one built for 215,00 with a end loan and try to sell it when its complete (1 year) with the hope of appreciation rising. So a investment of 11,000 (5%) down then sell for a 30,000 to 50,000 profit at completion.
Is this possible or a reach. Even if it takes 3 months to sell thats another 5,000 of cost to me but the profit should still be there ?
I wonder if there are alot of people doing this would this bring down the value of the homes? due to so many new homes for sale .

Thanks again
JMc

I'm interested in investing in real estate.I have look at homes in the Ft Lauderdale area in the range of 100 to 150,00 to rent out. After seeing how old and the work needed on these homes would it be smart to invest my $$ in new construction and rent that out instead. I could by the land and have a new home built for 150,00 to 170,00 in the area of Port St Lucie. With all the land and devoloping going on in St Lucie would this be a good idea.
I'm looking for the best way to make my investment work (nervous wife)

Thank you for your time
JMc
Answer -
Hi John, thank you for your question.  To begin with single family homes are not normaly a good investment unless you are hoping and counting on apreciation.  The new home idea is fine if you are going to live in it, to rent it out you would not make your money back.
The best thing to do is to invest in multiple units, such as dupplex, tripplex etc.. by having multiple incomes your return is better and in one goes vacant the others will help you out.
Call me or e-mail me directly, we specialize in investment properties.

Ricardo (Rick) Fornos
EXIT REEL Int'l Realty
954-457-7878
rick@ricardofornos.com
www.exitreelintlrealty.com

Answer
Hi John,

You have to consider all the expenses in selling a property and also capital gains, so if the homes are going for $260,000 and you can have one built for $215,000 and you have to pay approx 8.5% for selling cost including commission and you have to pay about 15% for capital gains, you do the numbers and see if they fit your criteria.

Good Luck,

Ricardo (Rick) Fornos
EXIT REEL Int'l Realty
954-457-7878
rick@ricardofornos.com
www.reeltor.com