Our Turn-Key Investment Property Program is for investors who want to buy-and-hold rental properties or vacation rental properties. If you want to hold single family homes or multifamily properties under your sole ownership and you want to minimize the time consuming and painful aspects of finding, fixing, leasing and managing a rental property — Restore 818 provides all the services you need to make your investment in South Florida properties turn-key.
Our Turn-Key Investment Property Program combines our extensive real estate investing experience with proven systems to make successfully investing in South Florida real estate simple and hassle-free. With our turn-key program we will identify and acquire undervalued properties on your behalf, while at the same time removing the anxiety of renovating and leasing your investment property.
You simply tell us your investment goals, fund an attorney escrow account, and we go to work. We will identify, negotiate and secure property meeting your criteria. In fact, we handle everything on the ground here in South Florida to maximize the potential for the profitability of your property investments.
The five pillars of our turn-key program are the same we use for our own property investments:
1) Identify areas prime for accelerated appreciation and high demand for rental properties
2) Qualify investment properties with maximum value potential (I.e.: properties with deferred maintenance, under-developed or not at highest & best use)
3) Analyze renovation work required to confirm that budgets are relative to purchase price and immediate ARV (After Repair Value.) This is the secret to equity-optimized property investments. (More on this critical factor in a minute.)
4) Develop an optimal renovation plan and execute project management of all construction work
5) Market for and screen qualified tenants to lease the property followed with reliable property management
As value investors our operating philosophy demands that an investment property not only provide substantial cash flow, but also that the investor should have a strong equity position on the property from day one. Cash flow and future appreciation are great, but a substantial equity position after stabilization opens multiple doors of opportunity in addition to providing peace of mind.
Our investment strategy is value-driven in both the short and long-term. We firmly believe that a strong equity position is key to securing investment positions and options — no matter what type of property or hold period. The only way to secure a significant equity position is to target properties in distress, disrepair or those failing to meet their highest-and-best-use. On short-term (fix & flip) investments this proposition may be more obvious. But on buy & hold properties it seems many investors forget the foundational strength of a strong return on investment through initial equity increase.
For example, it may upon initial analysis seem attractive to buy a $100,000 single-family turn-key rental property “ready for purchase” sitting in inventory in at some real estate investment company. This type of company offers instant gratification with a product sitting in inventory and makes claims that this finished product generates a 10% gross return. But the instant gratification does not come without substantial cost and the claimed ROI of these type of properties are often short sighted.
Typically that $100k “turn-key” product leaves the investor little or no enhanced equity beyond their initial investment amount. The company producing those Turn-Key Rentals is finding distressed properties, fixing them up, and then stripping the equity for themselves by selling the properties at market value. More importantly, those $100k properties are in areas that will experience “average” appreciation . . . AT BEST!
Now in South Florida a similar single-family rental property may cost $200k. Yes, South Florida real estate is a little pricier and the market is VERY competitive as one of the top real estate investment markets in the US. But there’s a big difference between the two options when you dig into the impact on your investment returns.
Comparison # 1. Total cash generated and gain on equity*
With Restore 818’s Turn-Key Rental Property Program we deliver homes where the investor typically will begin on day with a lease-ready property with a 10% to 20% equity-optimized position. That means an immediate 10% to 20% return on your initial investment amount. And that difference only gets magnified over your hold time. The chart below shows total cash generated (cash flow + resale value) for the two different type of Turn-Key Rental properties.
At the end of year one the typical TKR Product purchased from inventory has returned respectable cash flow, but is basically at a break-even equity position (you could sell the property for what you paid, including closing costs). The Restore 818 TKR has an additional $45,044 in equity over the initial investment amount. That’s a 20.84% gain in equity position alone! You see in the chart below comparing the same two properties that the Restore 818 TKR yields a 32% ROI on total cash generated upon sale of the property — just in year one.
Now you may not turn around and immediately sell a rental property, but what’s a more secure position to be in: sell the $119k turn-key product you purchased “off the shelf” completed for maybe $124k if you’re lucky, or sell your $205k Restore 818 turn-Key Rental Property for $240k?
More importantly think about that difference in equity position when using a “stabilize-then-finance strategy”. (This is the strategy where you pay cash for the purchase, lease the property for a year, then obtain a loan to finance the property after one year of operation. Lenders always prefer lending on a stabilized property with a proven track record.)
In the example above if you refinanced the Typical TKR Product pulling out 60% of your equity you’d walk away with $74,256, or a 4% gain on your equity position. Refinance the Restore 818 TKR under the same terms and you’d walk away with $156,026 which is a 21% gain on your equity position. Wash-rinse-repeat with that strategy on multiple properties and you have the makings of some serious wealth accumulation.
Comparison # 2. Cash on Cash returns*
Gross cash-on-cash returns (rental income – taxes & insurance) on Restore 818 Turn-Key Rental Properties in South Florida are comparable to other areas of the country with lower priced investment proeprties. You can see in the chart below comparing the same two TKR properties that the difference between the typical TKR Product and the Restore 818 TKR are around 1%.
However you can’t forget to factor in the fact that South Florida’s rapidly growing population (remember Florida just surpassed NY as the third most populous State) is putting more and more pressure on the demand side of the property rental equation. It is likely that this will equate to stronger increases in rents and further reductions in vacancies than other competing rental markets. For example, in 2015 South Florida was already ranked as one of the top 3 regions in the US for rent increases (at 14% for 2015.) That upward pressure on rents is a natural result of multiple converging growth factors impacting real estate in South Florida.
Comparison # 3. Accelerated appreciation*
All of our target acquisition areas are screened for the potential of accelerated appreciation. That means the potential for appreciation rates of two or three times the appreciation of surrounding neighboring South Florida neighborhoods. Keeping in mind the growing strength of Florida’s economy and demand pressure on both homes and rentals, that likely equates to exponential rates of appreciation compared to other areas of the country. We target properties in the path of city/county improvement projects and expanding areas of gentrification to achieve accelerated appreciation over hold periods typically for three to five year terms.
This unique value-based investment opportunity in South Florida lies not only in single-family and multi-family properties. South Florida has an abundance of mid-century commercial and multifamily buildings with significant architectural character un-paralleled in in new construction. Fortunately for us as investors many of these properties have been neglected over the years and are in desperate need of repair, renovation, modernization and adaptive reuse.
As we have seen with buyers of for our single-family homes the shifting demographics of South Florida, Eastern Fort Lauderdale in particular, has a strong leaning to a “preserve and restore” mindset. Therefore we see targeting this redevelopment niche as a unique competitive advantage in the single-family, commercial and multifamily market.
When we identify and present investment properties you will know the pros and cons of each. Because of our due diligence process, you will know everything about your investment before you purchase it.
~ How much cash you will need to invest for purchase and rehab
~ What renovations are required to maximize value
~ How much the renovations will cost
~ Who will manage the rehab of your investment property
~ Who will lease and manage tenants
~ What kind of cash flow and returns you can expect
~ What the options are for financing stabilized properties to pull cash out and put it to work in other investment properties
~ What your potential exit strategies will be
Because we take care of all the details our investors don’t need to know the local real estate market or keep up with micro and macro economic factors for the region. With our turn-key program our clients are able to own stable real estate investment properties in South Florida and grow their wealth. for maximized value we focus on Eastern Broward and Palm Beach Counties, including; Fort Lauderdale, Hollywood, Boca Raton, Delray Beach and other high-demand areas east of interstate highway I-95.
Take advantage of Restore 818’s Turn-Key Property Investment System and take the grunt-work out of real estate investing so that you can spend your time and money on the things that matter most.
Learn more about your options investing in Real Estate in South Florida with Restore 818 Inc. — call us at 786-217-6733 or email invest@Restore818.com.
* Charts are based on comparison of two actual Turn-Key Rental properties. Purchase prices and resale values were accurate at the time of analysis. Returns are calculated based on Adjusted Gross Income = [annual rental income] – [taxes + insurance] as this is the way most Turn-Key rental companies state returns. Always make sure returns are based on the same income calculation when comparing returns from different areas. Some TKR companies will state their returns based on Gross Income (Rental + other operating income only, with NO expenses.) Appreciation is based on 4% for the “Typical TKR Product” and a very conservative 5% for Restore 818 TKR properties. For example Eastern Fort Lauderdale as a general area experienced 14% appreciation in 2015. Our target areas of gentrification and redevelopment have the potential to experience accelerated appreciation beyond surrounding neighborhoods.