Caption transcript. This text is pulled from YouTube captions and may contain minor wording errors.
[00:00] We're going to look at a uh a property that I found. It's on the market right now. It's actually a pretty good deal. And I'm going to run through why I think it is. And if you're looking for t cash flow in Tampa, this is how you get cash flow on a $300,000 house. Let's take a look.
[00:22] So, I'm going to narrate it a little bit here, but you know, we see a little brick house. It's a block house for the most part. [Music] And you know, as we go through here, you can see there's so much space. This house is like, I don't know, 2,000
[00:39] square ft. And you know, if you're going to buy a property, I think it's like $150 a square foot um for pads split. Like, this is it's really hard to beat. I mean, there's going to be three bathrooms here. We just saw one
[00:59] and um I'm thinking this house is probably going to be end up being like a 10-bedroom, three bath house. And so, you know, like there's some work that needs to be done to the property. You know, probably like $80,000. And once this video is over, I'll share my my calculator with you guys to show you
[01:18] what I found. But this house right now has like the three bedrooms right there, the two bathrooms right there, and then all that space you can see and my little Dutch Brothers Coffee. Man, they just opened up in Tampa. Delicious. So all that space over there, it's like another three bedrooms. So
[01:37] we're at like six. It's the kitchen. Beautiful laundry room right here. here. I mean, this is this this has got its own little space accessible to everybody. And, you know, this whole room is probably another bedroom as well, but you have to remove that fireplace. So,
[01:56] you know, I'm hoping it's not a not a very expensive fireplace to remove. Oh man, drop ceilings need to be taken care of probably into drywall. And then this is a very big bedroom. So, if you're counting right now, I'm moving fast, but that's eight bedrooms already, and there's the third bathroom.
[02:19] So, the bathrooms actually look kind of okay. They don't need a full renovation, but like a a partial to each of them. And the drywall just looks terrible all over, you know? So, there's a lot of drywall work needed. Smooth textures over and stuff. Skim skim coating is probably what you want to do here. So,
[02:38] how do we get 10? Well, we're going to go to the garage here and we're going to convert into two more bedrooms. So, that simple. And this is a onecar a deep and wide onecar garage. And one of them will even have a um if you notice here, one of them will even have a oh man, it's not previewing. A little door, a private
[03:00] entrance and exit door to the backyard. So yeah, it's nice. [Music] Garages right now, I think they're taking like 20 like this would probably be somewhere along the lines of $25,000 to convert. Um, it might be a little bit more, but
[03:24] you would just frame in. You wouldn't remove that garage door. Like you probably just I don't know. I don't know how you do. There's a couple ways you could do it, but um that's basically it. You know, we can go back to the beginning here. Take a look at all these all this space. Like that's one room
[03:40] right there. Oh man, where' it go? I went uh too far. [Music] Well, I think you get the idea. It doesn't preview as I drag it. Oh, there you go. So, that that's this room right here is another two rooms. But
[04:03] anyway, the garage probably 25,000 maybe maybe up to 30 with uh you probably have to involve mini splits or unless you got a bigger AC that could handle induct to those two rooms as well. So, here's my calculator. We're going to put some numbers together.
[04:25] So, we're looking at a purchase price of we'll say low low 300s, right? It's kind of where it is right now. I don't want to give too much away, right? Uh in case I want to buy it, but but there's uh ARV and rehab budget. So, we're not really doing this to to like bur it out or to,
[04:50] you know, we really just want to kind of keep on par with the money you put into it. So, we have some closing costs. You know, we'll put 20% down, but you may have to go to 25. So, we'll do that. Probably $80,000 worth of work for the conversion for the walls, the the renovation of the kitchen, removing the
[05:08] the fireplace, ceilings, drywall, that kind of stuff. And then we have down here we have interest rate terms. Um, we have probably I need to turn this off. not doing a heliloc. We have probably um 5,500 in taxes a year and probably
[05:30] low 3,000s for insurance. And then the the cost for the furnishing cost for pads split here is I don't know something in the ballpark of $12,000. So really like 92, right, for the Renault and then the furnishing costs. So, let's go over to our expenses here.
[05:52] Make sure I have everything here correct. We have electric, water, sewer. Um, all this is checked true for pad split. So, all that should carry over. And their pads split fee on average is about 6%. [Music] So,
[06:10] we go here. Uh, 10 rooms on average. We'll assume we have one turn turnover per room per year. So, it's 10. I'm hearing some noises out there. And uh we got Man, we have a lot of cash flow here as you can see. So, I think if you went to 25% down, you're
[06:36] looking at $180,000 uh total cash needed and invested, which doesn't even include your carrying cost for probably 3 to 4 months to get it, you know, renovated, um, converted and then up and running. You probably need 3 to four months for that cuz it's $80,000. You know, a lot of people are
[06:55] like, "Oh, $1,000 a day, you know, is was kind of how long it takes us to get work done." So, if you're um hiring kind of your average contractor, you know, $25,000 is like a month. So, anyway, um that's a really high cap. It's a really high cash on cash return. And like I'm really trying to make sure I'm
[07:18] not forgetting anything right now. Um, man, it's probably an average 350 a month per power. It could go to 400 a month, right? Water could go to 200 a month if you have 10 rooms. Um, internet is fixed. Landscaping, I mean, I guess, you know,
[07:42] you can make it nicer and do 150. No pool service. We could have pest control at $50. uh month probably quarterly. So maybe 75 a quarter and then common room cleaning once a month. So let's see how that changes things. We're in the mid12s now for basically both of
[08:05] those. So um if you're looking for cash flow in Tampa, um now this is an exceptional property. Um it's not not common. Normally, I'm seeing cash flow between $5 and $700 a month, but with this one, um, well, we'll tell you what. So, let's say if you were to refy this property,
[08:24] right? Because you are investing $80,000 worth of cash. Let's say, let's kind of just assume this property, like you refied the renovation work, the budget into a mortgage. Let's just see what this does. This is um five. And we'll just put it at 7% too because
[08:44] maybe that's tricking uh you know tricking things a little bit. I don't think so. The cash on cash is still the same, but your cap rate does go down because cap rate is just NOI divided by purchase price, right? So, um it doesn't really care how much you know debt or or
[09:04] whatever you have. Um so cash on cash still mid 12elves. DSCR drops of course, but I mean your DSR lender is going to require 1.25. So 1.5 is pretty high. And then your internal rate of return is 21% over the course of 10 years. And so you can see the assumptions I have on this page here. Let's see. 10 years. It's
[09:28] only 2 and 12% um growth and then 4% property appreciation because this zip code actually has 4.5. Historically over the last 20 years on average, it's 4.5%. So let's see, that's 22% internal rate of return over 10 years. That's assuming you sold the
[09:48] property on year 10. at the end of year 10. And um I mean $1,000 cash flow a month. It's pretty good. So here's here's another thing. Um this zip code actually is about 210 a week. I know that changes things on the upside. However, it looked
[10:13] like the vacancy might have been a little bit lower. So we're going to put 84% on average. It's still a net gain because I think it's like a 6% decrease versus a uh it was like a 12% increase to or uh whatever that is 9% increase to the um weekly rate.
[10:33] So um looking for some buyers, looking for people who actually want cash flow and they're not, you know, afraid of uh something different, right? A lot of people want Airbnb properties, but I think the timing is probably a little
[10:54] bit bad for those right now. I mean, I have some people I've been talking to who are saying that the foreigners are not coming into the States right now to tour to to to travel and to do tourism uh for a number of reasons. Some of it being tariffs and other stuff. They're just not happy. So,
[11:15] there's some of that. Um, it might be shortlived, right? But, um, I don't know. In Florida, we also have hurricanes. So, it's like, you know, if you buy in the wrong place, you get hit by a hurricane pretty bad. You're number one, you're out of business for like 3 months while you repair and get permits,
[11:31] maybe even 6 months, deal with insurance. And then two, you have those macroeconomic factors kind of, you know, kind of working against you. And then in Tampa as well, I guess the third thing is kind of similar to number one. It's a little more hyper local, but you know, in Tampa, like the market is kind of
[11:48] saturated for a number of of smaller Airbnb properties. So, if you were to buy a bigger one, I think you'd be probably okay, but just keep that in mind. So, this is a Padsplit property. Uh, you can learn more about it um by my website, dillancook.com/padsplit. Also, uh you can reach me at my uh
[12:10] contact info below, dillanc.com, dillanylcook.com. And I think my number's in the description. Reach out, let me know if you're looking for cash flow. You don't have to buy a, you know, 100 unit property, uh, multifamily to get high returns. And in fact, those are actually really hard to
[12:30] get those returns right now. But a smaller property like this, um, you build a small portfolio of them. It might take a little bit of time to find the right ones, but you'll be doing really well. Thanks for watching.
