Blog, Income Property

Southwest Florida REO Duplexes

Where can you find a property today for $75,000 that has an annual Net Operating Income (NOI) of  over $9,000 a 12% annual return on what you actually PAID?  Where can you find a cash on cash return annually of over 13% backed by real estate?

As mentioned earlier, our REO division has structured a powerful cash flow opportunity that it has been a topic of discussion in our Hoboken office.  Utilizing our asset management contacts, bank reps, and REO brokers, we have come up with a turn key program that mitigates even a “worse case scenario” risk.

We are approved to buy duplexes in Lee County, Florida for a discount of over 80% from the original note.  During the peak, duplexes were built by homeowners and speculators for a land/construction cost  of $280,000 to $310,000.

Once you contract for the duplex, it is likely a 30 day closing.  In the meantime, we can finalize cosmetic appeals and also contact property management who will put the duplex in his “available rental unit” program.  In most cases it takes only 3 weeks to occupy the duplex once advertising begins and the rental rates are a solid $650 per side monthly.

Annual real Estate taxes run approximately $1,300 per year and Average insurance premiums for an LLC owned Duplex run about $750 per year, covering wind, flood, fire, and all that you need.  Although these duplexes are located only minutes to Ft. Myers Beach, Sanibel Island, Naples, etc, we are focusing on the western side of the county which is not located in any flood zones.  Property Mangement charges 8% monthly and lawn maintenance will run about $50 per month.

Annual Operating Expenses run about $3,700 per year.

Whether you are looking to finance or pay cash, the cash flow figures are very powerful.  Lee County has been the poster child for foreclosures recently, but the last 4 months have helped stagnate prices.  In November 2008, 980 homes were sold.  In December, over 1000 homes were sold.  In January, over 1000 homes were sold.  And in February, 900 homes sold.  This is an average increase of 400% in real estate sold since the previous year.  Although it may take a couple of years for FL to take major appreciation levels, the prices today and the cash flow generated mitigate nearly every other possible risk involved.

Contact our principal Scott, in Ft. Myers, FL at (239) 872-5107 for further details.  Duplex pictured in this post is the same or similar to the ones’ that we purchase.

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