When demand is high and supply is low you take a deep dive into the playbook to find the right play for the current cycle. Rick Melero is on the road cruising through one of the country’s hottest markets providing an inside look into some of the strategies the team is focusing on this year.
Hey Guys! Rick Melero here with HIS capital and I’m really excited because I’m taking you on a journey as we go to Tampa and St. Petersburg which is one of the markets that we’re investing heavily in and we’re going to show you in this journey a lot of the things we’re doing and in fact today I’m actually at one of the parcels that we’re purchasing with one of our operating partners in St Petersburg. Now what’s really cool and what I want to share with you guys is I want you to see that when the market shifts and we’re in a growth stage. One of the best things to do is to locate communities such as this area where we’re at today because these are areas that are up and coming. There’s population growth taking place but the problem is as the population expands there’s not enough real estate for people to actually be involved and build more homes and so what we look for is homes like the ones in the background here that may have an infill out in some of these communities already connected to city sewer.
Maybe it was owned by an individual and then and what we do is either buy the property and knock it down or we just buy the parcel like we did in this deal with our partners so that we can build a spec home now. What’s really cool is this in the project that we’re building right now. This property we’re going to be planning on going vertical. What we’re doing is we’re looking at the price point in the community and in fact there’s a duplex right next door that was built in the 1920’s that just sold for over 495k so what we’re going to do is we’re going to spend about 250k to 275k building a beautiful brand new home here. We’re buying it for eighty nine thousand dollars and our after repair value, which we anticipate selling this property for, is going to be roughly 550k to 600k.
So, this is a great opportunity where we can’t necessarily compete with the local market but we can create our own inventory and create our market in a property just like this one so again we’re being real strategic. We’re finding locations that are growing and expanding and are being revitalized and then we look for those infill lots or those homes that we can buy and demolish so that we can build something fresh and create amazing equity so finish watching this. Take a look at the project and in the next video we’re going to show you with our operating partners exactly how we’re doing these deals together.