I own 10 investment properties in tampa zip codes 33604,33605,33602 all historic type propeties purchased

Asked by Chris, Tampa, FL Thu Nov 22, 2007

around 2005, at the peak of the market. Rents no longer pay mortages so I am going negative. I can hold all the properties for about 2 years. Sould I try to sell now at break even or gamble that the market will be better in 2 years

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Theace, , Tampa, FL
Sun Feb 10, 2008
As we professionals like to say "you are up the creek without a paddle" or in your case, ten paddles.

An honest realtor.
1 vote
Jeff Launiere…, , Tampa, FL
Thu Nov 22, 2007
Unfortunately, you are in the situation that many other investors are in right now. With all the investors that came into the Tampa market in 2004 and 2005, the same investors are now trying to sell their properties. In Tampa, we presently have a 18.48 month inventory.

The biggest problem is how long before the market comes back. Watch any money show on Sundays and you will see that there is no agreement on what will happen. Forbes and Economy.com predicted recently that the Tampa market will be making a strong comeback in the first quarter of 2008. There are three types of recoveries. One is an L shape recovery which is what Detroit is supposed to be. This is where prices drop quickly and then just languish for an extended time. Other areas such as Boston are supposed to go through U recovery's where prices come down then make a slow recovery. Tampa according to Forbes and Economy.com will go through a V recovery. This is where prices decrease, then with little notice make a very fast recovery. They may be right, though I think their timeframe is unlikely as long as we have a 18.48 month inventory. This is actually a decrease from 20 months last month. However, this jumps around a bit each month. The inventory levels for this year have been 16.69 months in January, 15.91 in February, 14.60 in March, 16.34 in April, 15.98 in May, 14.40 in June, 16.28 in July, 14.94 in August, 20.10 in Sept., and finally 18.48 months in October. Therefore, even though it decreased last month the inventory is very high. This also show the difficulty of determining when the market has truly improved. It is also one of the reasons many people end up buying at market highs and selling at market lows.

In 2006, we averaged 8 months of inventory, in 2005 it was 2 months of inventory, and in 2004 it was 2.8 months of inventory. As you can see with more than 18 months we are in a serious buyers market.

The question you have about trying to sell and breaking even or what the market will be in 2 years, is hard to say. My best guess is that we still have a lot more hard times to go. Foreclosures are still increasing and we are likely a year to 18 months before we start seeing that situation get much better. With that will be pricing pressure.

The best thing to do is to ask your Realtor, or if you do not have one, choose one of us that are on Trulia or from recommendations. Have your Realtor do CMA's for your properties to see what is actually a realistic asking price, that will result in a sale.

Your Realtor should watch the inventory levels and keep in touch with you about them. One month of lower inventory levels tells us nothing, but if we start to see three or months in a row of good reductions of inventory levels it will start to show signs of a better market.

The biggest issue will be how much more of a decline in prices there will be, and will the prices rebound in the next two years. I believe we have not hit the bottom yet, and when we do it could take quite some time for the prices to go back to where they were when they hit the top.
1 vote
Carrie, Both Buyer And Seller, Say Cheese!
Thu Nov 22, 2007
Is there any way to increase rents? What are the obstacles?
1 vote
Michael Vald…, Agent, Tampa, FL
Thu Nov 22, 2007
Hi Chris!

If I were you I would wait till the market stabilizes and then put them up for sale. We still have 1-2 years of inventory for sale and only homes that are priced right are moving. If you bought in the peak of 2005, more than likely you probably do not have much equity to play with. If your homes are currently rented out, you are really going to have a hard time selling right now because most investors are not buying right now especially if the property does not cash flow or has tenants where you are unable to break the leases. Investors are waiting for the market to bottom out... hopefully we are close to the bottom!

Hope this helps...have a Happy Thanksgiving!

Michael Valdes
e-Pro Realtor/ Mortgage Broker
The FlaPropertyFinder.com Team
Keller Williams Realty
1 vote
Theace, , Tampa, FL
Sat Aug 16, 2008
Here we are one year on and all ten of this fools properties have been foreclosed.

An honest real estate pro.
0 votes
Gary De Pury, , Pasco County, FL
Wed Feb 20, 2008
Can you break even on the properties? If so, I would be interested in seeing them. If you are going to lose money then I would hold if you can, but again, if you can get out even and are serious about sellling, I am adding ot my rental inventory.

Gary De Pury
0 votes
Mark Zabilow…, Agent, Lutz, FL
Thu Nov 22, 2007
Chris,
Happy Thanksgiving!
All indications are we will still feel the pinch for another 6-12 months. We are also expected to make a V recovery (recover more quickly) than other markets where they'll see more of a slower U shaped. When did you purchase these properties??
In my opinion If you can weather the storm and keep the properties you may be better off than dumping them now.
Although I wish I had a magic crystal ball to better answer your question. I'm already seeing pricing in some areas comparable with late '05 prices.
0 votes
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