Over 10% return on $42,000 condo

This property is not my listing but I look for great deals daily for my buyer clients.  I FOUND ONE!

This property is featured on my website, courtesy of Beach and Forest Realty in Mytle Beach.

This is a lender approved short sale and can close quickly. Since the location is an easy walk to the beach you shouldn't have any problems keeping long term renters in place. Or keep it for yourself as an affordable place at the beach.

This home has a working fireplace and a pool and very low HOA fees -- only $65.00 per month. Building insurance is obtained individually by each owner. A little paint is all this property needs and it is ready to go.
You can see more information on this property by visiting my website at www.MyrtleBeachDreaming.com


Check out the cash flow numbers:

Not guaranteed by Broker but believed to be accurate.

Income/Expense Comparison				Brandywine North
Purchase Price				$42,000
Percent Down				0%
Interest Rate				0.00%
Down Payment				$0
Mortgage Amount				$0
Monthly Payment				$0
Annual Payment				$0
Est. Total Rents				$8,400
Net annual rent				$8,400
Est. HOA Annual			$65	$780
Est. Property Taxes				$1,099	Second home rate
Est. Bldg. Insurance				$1,700	Estimated
Est. Telephone				$0
Est. Content Ins.				$0
Annual Mortgage Payment				$0
Total Expenses				$3,579
Est. Pre-Tax Cash Profit/Loss				$4,821
	Return:			11.48%

The Largest Residential Pool in SC

Waterbridge on track in Carolina Forest area - Business - TheSunNews.com

Carolina Forest will soon be the home to the largest residential use pool in South Carolina. Carolina Forest is a bedroom community of Myrtle Beach and the entire community is no older than 10 years.

I remember driving through the future Carolina Forest area with a friend way back in 1996. International Paper owned thousands of acres and although much was planted with timber, most of the acreage was not harvested. We saw evidence of bears and other wildlife that sadly has been displaced by man.

I've lived here since 1976. I still lived in Murrells Inlet (20 miles south of Myrtle Beach) at the time and would help out some friends who had several shops in Windy Hill Beach (North Myrtle Beach). I recall driving from the Inlet to Windy Hill with NO STOP LIGHTS and all the property on both sides of the road was farm land and horse pasture.

The name of the shops location was called "Village of the Barefoot Traders" which today goes by Barefoot Landing.

Home Mortgage Rates Hit New Lows

Freddie Mac's deputy Chief economist states that this is the ninth week in a row that fixed rate mortgages have met or set a new record low. Rates on fixed rate home mortgages dropped this week, according to Freddie Mac's weekly survey of conforming mortgage rates.

The 30-year fixed-rate mortgage averaged 4.42% for the week ended Aug. 19, the lowest since Freddie started tracking the rate in 1971.

The 30-year mortgage averaged 4.44% last week and 5.12% a year ago, according to the survey.
Fifteen year fixed rate mortgages averaged 3.9% this week, down from 3.92% last week and 4.56% a year ago. This week's average is also the lowest since Freddie Mac began tracking it in 1991.

Five-year Treasury indexed hybrid adjustable rate mortgages averaged 3.56%, unchanged from last week and down from 4.57% a year ago.

One year Treasury indexed ARMs averaged 3.53%, unchanged from last week and down from 4.69% a year ago.

To obtain the rates, the 30 year fixed rate mortgage and the one year ARM required payment of an average 0.7 point. The 15 year fixed rate mortgage and the five year ARM required an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.

Red flags in short-sale counteroffer | Inman News

Red flags in short-sale counteroffer Inman News

Does it really take 6 to 9 months to find out if a lender will accept your short sale offer?

YES!!!!

This link above shares a short article from an industry expert about short sales, the problems with closing them, and red flags you should be alert to that could signify working with the wrong agent. It is ALWAYS best to have your own buyer's agent looking out for your best interests and placing your best interests over theirs.

My New Hobby

A good friend of mine recently introduced me to kayak fishing in the serene waters of Murrells Inlet which is located just south of Myrtle Beach. Murrells Inlet is known for many great seafood restaurants and of course, lots of good fishing.

I caught my first redfish (red drum) a few months ago and I really enjoy going out on the water, especially early in the morning when it is so quiet and peaceful. The fish tastes great when it really is that fresh too.

This isn't real estate related but I thought you would like to get to know me a little better so from time to time I will include little bits about what I am doing.

P.S. I know where the good spots are too!

When is a Good Time to Buy?

I am asked many times when is a good time to buy ocean front property in Myrtle Beach. Since I can't predict the future, I always rely on the past to give me some insight.

Our ocean front market is busiest in the early to late Spring. In fact, prices typically go up at that time due to multiple bids on the choicest properties. We start to see a slow down during the months of July and August as investors realize that they will not be able to close in time to take advantage of the heaviest rental income months, namely June, July and August.

Also in the past, price was more negotiable in the Fall and Winter months as sellers realized that buyers wouldn't make the maximum rental income.

My advice is to make your ocean front condo purchase anytime during the months of September to February. If you wait too late, you will probably end up paying more for the property. So, even if you do buy in September or October, you will still be getting some rental income and you could buy at a lower price. Bidding wars can be avoided by buying in this off season.

If I was going to buy a single family home then anytime is a good time to buy. Since the single family home is not rented for income, the prices are not as volatile.

Taxes Show Tourism Turnaround

County tax revenue from tourism related taxes is up.



The taxes received from the 1.5% hospitality fee was up 5.1% in June 2010 compared to June 2009. July revenue is expected to see at least a 20% gain.



Tourists are spending more money while they are here. Read the whole article published in The Sun News here.





http://www.thesunnews.com/2010/08/08/1624185/taxes-show-tourism-turnaround.html

BP Oil Catastrophe Update for Myrtle Beach

A professor from Coastal Carolina University talked to a group of us the other day. He stated that even if the oil from the BP catastrophe in the Gulf were to make it into the Gulf Stream, South Carolina beaches should not be affected in a serious way. He stated that because of the way the continental shelf is along our coastline we have some protection from the oil. He does not anticipate any substantial problems along the South Carolina coast.

I spoke with Phil Wehrung yesterday who is the Homeowner Services Representative at Compass Cove in Myrtle Beach. He believes that the concern of oil on the Gulf beaches has driven more people to visit Myrtle Beach. Phil says that rentals at the property he manages have been up and he credits a large part of that to folks who don't want to take a chance that a holiday in the Gulf area would be ruined by the oil on the beaches. Great news for us but I would give that extra rental income back any time if we could reverse this horrible environmental disaster.

Breakers Boutique 3 bedrooms cash flow with 100k down

Here is an estimated cash flow for a Breakers Boutique 3 bedroom. I made some assumptions with the purchase price and of course we would try to get that even lower. One of the reasons that these condos do above average rental income is because the condo is considered a “lock out” which means it can be rented as a 3 bedroom, efficiency or 2 bedroom. That’s good for you too in case part of the condo is rented you could still come down with a smaller party and stay in part of it.
When we EVER get the economy rolling again you can expect this to give you some positive cash flow as in the past these have produced almost 60k in gross rents. You get 59% of the gross rents here.

This property is associated with the Breakers Group. The rental manager, The Brittain Group, has a stellar track record for producing some of the highest rental income on the beach and they also take less for their cut. The split is 60% to you and 40% to them but I use 59% to you as they charge 1% for replacing items like coffee pots, glasses, silverware, TV remotes (they are taken almost half the time!?)

Income/Expense Comparison Breakers Boutique 3 Bedroom oceanfront


Purchase Price $220,000
Percent Down 45%
Term arm
6.25%
Down Payment $99,000
Mortgage Amount $121,000
Monthly Payment $745
Annual Payment $8,944

Est. Total Rents $48,000
Est 59% Rental Mg $28,320 *

Est. HOA Annual $1,318 $15,816
Est. Property Taxes $4,745 **
Est. Bldg. Insurance included
Est. Telephone $25 $300
Est. Content Ins. $0 ***
Annual Mortgage Payment $8,944
Total Expenses $29,805

Est. Pre-Tax Cash Profit/Loss -$1,485

*2009 rental income used from #1750-51-52
** 2009 property taxes used, should be lower in 2010 due to reassessments. Est. $3,300 for 2010
*** HO6 insurance (contents, liability) is included in monthly HOA payment



Here is a link to some properties that have the same floor plan. You will notice that they all seem practically identical as the floor plans are the same and since these came furnished by the developer originally the furniture is almost all the same. It can usually take about 7 years from new to change out all of the furnishings and bedding. It doesn’t happen all at once but when the developer/rental manager notices that the couches are looking worn, they contact you to suggest that you replace it. Even though you could replace it yourself, the rental manager usually gets a much better price since they are ordering multiple couches. Plus, you don’t have to do anything except OK the order.

Click Here to View Listings: http://CCAR.fnismls.com/publink/default.aspx?GUID=499a625e-4b14-45f2-962f-4eb84584ab61&Report=Yes

Once you deduct mortgage interest expense and accumulated depreciation you should find that the condo cash flows. You could expect better numbers when the economy improves. I have been told that we are still seeing lots of people coming to the beach but all of the ocean front condos and hotels had reduced their rates in the last year or so to attract the weary/broke vacationer. I understand that rental rates are starting to creep back up this year.

If the link to properties no longer works, please visit my website or send me an email and I'll send you an updated list. The links to MLS properties only stays live for about 30 days and if you are reading this post any later you will want an update on these condos.

http://myrtlebeachdreaming.com/

Why are rental commission so high on the ocean front?

When most folks hear that the rental split is 59/41 with 59% of gross rental revenue going to the owner and 41% going to the rental manager they think "Holy Cow, that is more that I am used to hearing about for renting property. It turns out that is a better rental split than most ocean front rental managers give. And, the best split comes from one if the best rental managers in Myrtle Beach.

The Brittain Group is the only ON-SITE rental manager on the ocean front in Myrtle Beach that has that low of a rate. Almost all of the other rental managers charge 46% so getting 59% is the best. It has been this way for as long as I have been selling the ocean front which is about 10 years now. In fact, The Brittain Group used to charge the typical 46% fee until last year when the economy took a turn for the worst. They were the only rental group that voluntarily decided to give the owners a better deal. (That could have been because LOTS of people complained that they were making less rent due to the rental manager lowering rates to tempt stressed folks to vacation.) But at least they listened and were reasonable whereas most other rental managers did not budge.

The key is that the on-site rental manager may charge you more, but in 100% of the instances I have researched, they give you a better BOTTOM LINE than an off-site rental manager who only charges 30% to 35%. This is a weekly or nightly rental operation, not a month to month or annual situation. They also bring in approximately 28k of NET rental revenue, better in better economic times. They have the front desk, maid service, linens, towels, etc. They can put golf packages together and run very smoothly a 200+ condo hotel building. Go to TripSmarter.com and research some of the names of the resorts they manager like The Breakers, Breakers Boutique, The Caribbean, The Compass Cove, and Monterray Bay Suites to see comments from guests and go to the websites to see what the resorts offer. In the summer they offer “kid camps” and in the fall they will have cocktails and promos for golfers. They do spend time and money making sure your guests are happy and want to tell their friends and come back next year for a great vacation. Customer service in Brittain Group managed resorts is the best on the beach.

Take a look at my website to search the MLS or to sign up for my newsletter. http://www.myrtlebeachdreaming.com/