Author: John Conde

Investing in Real Estate: Is Commercial or Residential Right for You?

Posted on by John Conde

Introduction

Investing in real estate has long been considered a solid way to build wealth and generate passive income. However, before diving into the world of real estate investment, it’s crucial to determine which type of property aligns with your financial goals and risk tolerance. As an experienced Orlando real estate agent, I’m here to guide you through the decision-making process of choosing between commercial and residential real estate investment.

Understanding Commercial and Residential Real Estate

Commercial Real Estate:
Commercial real estate refers to properties that are intended for business purposes. This category includes office buildings, retail spaces, industrial warehouses, hotels, and multifamily properties with five or more units. Commercial properties are often leased to tenants for various periods and can provide substantial rental income. They can be more complex to manage due to factors such as tenant turnover, property maintenance, and market fluctuations.

Residential Real Estate:
Residential real estate in Orlando, on the other hand, encompasses properties used for residential purposes. This includes single-family homes, condominiums, townhouses, duplexes, and small multifamily properties with fewer than five units. Residential properties are typically leased to individuals or families, offering stable rental income. The management of residential properties is generally more straightforward compared to commercial properties.

Factors to Consider: Commercial vs. Residential Real Estate Investment

  1. Risk and Return:
    Commercial properties often have higher earning potential due to larger rental incomes. However, they can also carry higher risks, especially during economic downturns. Residential properties tend to provide more stable rental income, making them a safer option for beginner investors.
  2. Initial Investment:
    Commercial real estate usually requires a larger initial investment compared to residential properties. Residential properties are more accessible to individual investors with limited capital.
  3. Management and Involvement:
    Commercial properties demand more involvement in terms of property management, lease negotiations, and tenant relationships. Residential properties tend to be less demanding in terms of management, making them a suitable choice for those with limited time.
  4. Market Trends:
    The demand for commercial properties is closely tied to the overall economic health of an area. Residential properties can be influenced by local market trends, population growth, and lifestyle changes.
  5. Location:
    Both commercial and residential properties’ value can greatly depend on location. In Orlando, for instance, commercial properties near tourist areas might yield high returns, while residential properties in growing neighborhoods can attract long-term tenants.
  6. Long-Term Goals:
    Consider your long-term financial goals when choosing between commercial and residential real estate. If you’re looking for a stable income stream, residential properties might be more suitable. If you’re willing to take on more risk for potentially higher rewards, commercial properties could be the way to go.

Conclusion

In the world of real estate investing, the decision to invest in commercial or residential properties is a significant one. Both options have their own pros and cons, and the right choice depends on your individual circumstances, financial goals, and risk tolerance. As an Orlando real estate agent, I’m here to help you navigate this decision-making process.

Whether you’re interested in the potential high returns of commercial real estate or the stable income of residential properties, my expertise can guide you toward the right investment for you. Contact me today at 407-902-7750 or visit https://orlandorealtyconsultants.com/, let’s work together to make your real estate investment dreams a reality. Remember, no matter which path you choose, investing in real estate can be a rewarding endeavor with the right guidance.

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The Pros and Cons of Short Sale : Explained

Posted on by John Conde

Understanding how a short sale works in Florida is essential for both realtors and potential buyers or sellers who find themselves facing financial distress. This intricate process involves navigating legal and financial complexities while working within the framework of Florida’s real estate laws. From listing a property to successfully closing the deal, let’s explore the step-by-step journey of how a short sale works in the Sunshine State from a realtor’s perspective.

1. Initial Assessment and Qualification

The process begins with a homeowner who is struggling to meet their mortgage payments due to financial hardships. The homeowner reaches out to a realtor, seeking guidance on how to proceed. The realtor’s first step is to conduct an initial assessment of the homeowner’s situation to determine if a short sale is a viable option.

During this stage, the realtor evaluates the homeowner’s financial circumstances, the property’s current market value, and the outstanding mortgage balance. If it’s evident that the homeowner owes more on the mortgage than the property is worth, the realtor can proceed with the short sale process.

2. Listing the Property

Once it’s established that a short sale is a viable option, the realtor lists the property on the market. This involves creating a comprehensive listing that highlights the property’s features while also disclosing that it’s a short sale. Transparency is key, as potential buyers need to be aware of the unique challenges and timelines associated with a short sale transaction.

3. Marketing and Buyer Offers

The realtor employs their marketing expertise to attract potential buyers to the short sale property. They may use various channels, such as online listings, open houses, and real estate networks, to showcase the property’s value and potential.

As offers from potential buyers start coming in, the realtor reviews each offer carefully with the homeowner. The goal is to identify serious and qualified buyers who understand the intricacies of a short sale and are willing to be patient throughout the process.

4. Submission of Short Sale Package

When a suitable buyer is found and their offer is accepted by the homeowner, the realtor begins assembling the short sale package. This package includes a comprehensive array of documents, such as financial statements, hardship letters, tax returns, and a purchase contract. The package is then submitted to the lender for approval.

5. Lender Review and Negotiation

Once the short sale package is submitted, the lender initiates a thorough review process. This involves assessing the homeowner’s financial hardship, the property’s market value, and the buyer’s offer. The lender may also order an appraisal to verify the property’s value.

During this stage, negotiations can take place between the realtor, the homeowner, and the lender. These negotiations center around the sale price, outstanding debt, and other terms that need to be agreed upon before the lender approves the short sale.

6. Lender Approval

After thorough evaluation and negotiations, the lender makes a decision regarding the short sale. They can choose to approve the short sale, which means they agree to accept a lower amount than what’s owed on the mortgage. Alternatively, they can reject the short sale if the terms do not meet their criteria.

7. Buyer Due Diligence and Inspections

If the lender approves the short sale, the buyer is given a window of time to conduct due diligence, inspections, and appraisals on the property. This step is crucial for the buyer to ensure they are making an informed decision and to identify any potential issues with the property.

8. Closing Process

Assuming the buyer is satisfied with their due diligence and inspections, the realtor and their team work diligently to move toward closing. This involves coordinating with all parties involved, including the homeowner, buyer, lender, title company, and any other relevant parties.

9. Completion of the Sale

Upon successfully navigating the closing process, the sale is completed. The homeowner is relieved of the mortgage debt, and the property is transferred to the buyer. The entire transaction is documented through the necessary legal and financial channels, ensuring a smooth and transparent transfer of ownership.

Conclusion

Navigating a short sale in Florida is a complex journey that requires expertise, patience, and a deep understanding of the state’s real estate laws. Realtors play a pivotal role in guiding distressed homeowners and potential buyers through this process, from initial assessment to successful completion. By understanding each step of the process and leveraging their negotiation skills, market knowledge, and legal expertise, realtors ensure that all parties involved are well-informed and prepared to navigate the challenges of a short sale transaction in the state of Florida.

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Is Orlando Headed for Another Housing Bubble?

Posted on by John Conde

Homes in Orlando Continue Going Up in Price

Is the real estate market in Orlando Headed for Another Housing Bubble? There are a few reasons why the answer is yes, but what is the most likely reason? Several factors can lead to a housing bubble, including an imbalance between supply and demand. A housing bubble occurs when the price of homes exceeds the supply, resulting in competition that drives up prices. When a housing bubble breaks, it is often difficult to recover from the shock. Another contributing factor could be the tremendous number of mortgage forbearances that are soon due to expire. However, there are a few steps you can take to protect yourself from a real estate bubble in Orlando.


First, you must remember that a housing bubble will eventually pop, so you can’t wait around to make your purchase. Once the mortgage rates start to rise, your potential mortgage payment will increase. While mortgage rates are at historic lows now, the market may be heading for another bubble soon. In the meantime, properties purchased today will likely continue to appreciate. This is especially true if you plan on living in Orlando for many years.

The rapid rise in home prices does not necessarily mean that the market is headed for another housing bubble. However, it does indicate that speculative activity is growing in the housing market. If home prices continue to rise without any correction, the real estate market could become oversaturated with investors buying homes for the purpose of quickly selling them for profit. This process, known as house flipping, has been increasing in recent months. While it might seem like a warning sign, it’s not a cause for alarm.

While Florida has a long history of housing bubbles, it has been relatively sheltered from them. While there may not be a bubble in Orlando just yet, it has been in other regions of the United States. According to McGrath, nine metro areas in Florida have experienced home price increases of forty percent or more. In most cases, a housing bubble pops when prices begin to cool off.

If the housing market continues to rise, people will start moving farther out and buying smaller homes and fixer-uppers. This will make it harder for those who can’t afford the more expensive homes to become homeowners. Another factor to consider is gas prices. If gas prices continue to rise, people may be reluctant to buy homes further away from their jobs. In these situations, they may decide to rent instead. The result will be another housing bubble in Orlando.

The Orlando real estate market is experiencing major growth, thanks to booming rental income. The city’s population is growing at a rate of 7.2% annually, and it’s projected to hit one million people in 2020. In 2019, there were only 1,923,000 people in Orlando. The rate of growth is even higher than the Bay Area, so this is a positive factor for the housing market. This means that rental prices are increasing in Orlando.

If Orlando’s housing market doesn’t recover, the next bubble may be the one that comes. Home prices in Orlando are rising at a very fast pace, with median prices at $335,000 and the median sold price at $237,000. This means that the housing market in Orlando is a seller’s market. With so little inventory, it is a seller’s market. With this in mind, it’s essential that you protect yourself and your home from a real estate bubble.

While the housing market is growing at a rapid pace, the real estate market in Orlando is growing faster than most other cities in Florida. This has made the area a very attractive investment opportunity for many people from around the world. With its scenic beaches, growing economy, and intercultural connectivity, Orlando is a hotspot for real estate investment. The median home price has increased 14.6% since November 2019. Those who bought real estate in Orlando during the last bubble have realized a return on their investment.

In Orlando, new home construction is hot, with demand outpacing supply and rising costs of construction materials. This is driving new home prices even higher. The new homes sold in April were up 20% year over year, but this price increase reflects the cost of construction materials and the unsustainable price gains. It will likely price some prospective home buyers out of the market. It will likely take more time for the housing market to recover from this new bubble.

Orlando Real Estate Broker

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Cash buyers fueling Orlando Real Estate market recovery

Posted on by John Conde

The Orlando Real Estate market recovery continues on a positive path and some Orlando realtors claim that the tidal wave of cash deals is behind the recovery. “Florida realtor” studies show that fifty-one percent of single-family home sales are all-cash deals. Cash buyers have a huge edge over buyers that need to qualify for a mortgage and they are preferred over traditional buyers by sellers as well as listing agents.

One reason is that cash buyers have their own money and don’t have to wait on any mortgage company for anything. Also,  sellers know that a cash deal means a quick closing, this can mean big savings for the seller who has to make another mortgage payment for every month that their home is on the market. These days a cash offer doesn’t always mean a low ball offer anymore, investors are aware of the competition and a low ball offer could mean losing the deal.

As Orlando realtors,  we are seeing more cash offers for the full listing price of properties than ever before.

Lower-end properties [under 100k ] are being devoured by investors because of the huge demand for rentals right now. Cash investors are able to buy more of the less expensive properties and turn them into monthly cash cows. And although lower-end properties are also being bought and then re-sold for a modest profit, for the most part, we are seeing them end up as rental properties.

Other investors buy properties with the sole intention of flipping them. They want nothing to do with being a landlord and are only interested in getting in and out of a property as quickly as possible.

These buyers usually have to do some rehabbing in order to see some substantial profit and this means that they are usually pretty limited on how many they can do at once. I have investor clients that will buy one or two properties and then have to wait until the houses are renovated and sold before moving on to the next deal.

So what does this all mean for the Orlando Real Estate market?

I believe that all the cash purchases that are happening right now are driving up prices as well as home values in the Orlando real estate market. And the healthier the market is, the less risk there is for lenders to approve more mortgages for traditional buyers. This is all great news for now and hopefully will be for several years to come.

What worries me is that if home prices continue to rise to unjustifiable degrees, banks will then start giving mortgages to people that can’t afford them, then…2007 all over again!

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Benefits of Living in a Planned Community

Posted on by John Conde

  An Orlando home buyers must have list is based on a number of factors, but most lists generally consist of the same expectations. They want an updated kitchen, open floor plan, nice size bedrooms, and walk-in closets. However, above anything else, there is one requirement that is on every home buyer’s wish list – location, location, location.

 

The area in which you live is important for many reasons, including:

 

·         Proximity to friends and family

·         Proximity to schools for kids

·         Commute to work

·         Convenience to stores and restaurants

·         Hobbies and interests

 

This is just a shortlist of reasons why location is a top priority for home buyers. Land developers understand the value of location and convenience and that’s why some build master-planned communities on the land they own.

 

Reasons to Buy  

In addition to location, there are countless perks of buying a home in a planned community. Factors like parks, amenities, and quality of the home are major influences in the overall landscape and architectural design of such developments. Here are seven reasons to buy in a planned community:

 

1.       Convenience – Possibly one of the biggest reasons to buy in a planned community is convenience. You simply can’t beat being five minutes away from the grocery, restaurants, and shops – many of which are walking distance from your house.

 

2.       Amenities – Planned communities allow residents to enjoy all the luxuries in life, including access to a gym, golf course, and swimming pool. Other amenities like new schools, parks, and trails add to the perks of living in a planned community.

 

3.       Sense of Community – There’s nothing better than living in an area where neighbors gather and plan activities together. Residents of planned communities take pride in where they live and support others who live there as well.

 

4.       Social Life – This is part of the shared sense of community. Regardless of your personality or hobbies, neighbors automatically feel a bond because of where they both call home. Everybody knows everybody in planned communities and because so many places are within walking distance, it’s common for families to plan meet-ups on a regular basis.

 

5.       Security – Planned communities offer something that most neighborhoods can’t and that’s a sense of safety. Regardless of whether the community is gated or not, residents of planned communities feel safer because of their relationship with their neighbors. They look after each other and most importantly they trust each other.

 

6.       Maintenance – Planned communities are typically associated with homeowner’s associations that ensure the community’s landscape remains clean and maintained. Some communities take care of gardening, mowing, and other landscaping duties because it’s included in the cost of living in the community.

 

7.       Investment – If all other perks of owning a home in a planned community don’t persuade someone to buy, the pure investment of purchasing should. Buying a home in an upcoming planned community is typically a great investment as housing prices usually rise as the development becomes more established. If you happen to buy when the community is already developed, homeowners can feel safe in knowing that their property won’t depreciate in value.

 

It’s clear that planned communities have perks that most Orlando home buyers strive to find. It’s a relaxing environment that offers more convenience than anyone could ever dream of having.

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