Pat Beall
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Jeff Ostrowski
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Going to Jax for positive cash flow
North Palm Beach real estate investor David Sprague offers a case study in why Palm Beach County sales volumes have cratered: Investors, who were driving the local real estate market in 2004 and 2005, are out of the picture.
Now, after five years of home prices rising far faster than rents, it’s nearly impossible for an investor to find a home where the monthly rent covers the mortgage, insurance and property taxes.
“I look at properties all day long, and I can’t find positive cash flow in Palm Beach County,” Sprague says.
So he has looked north to Jacksonville, where he has bought five homes in recent months. Median home price in Jax in April was $199,600, about half Palm Beach County’s $386,500, according to the Florida Association of Realtors.
“It’s very possible to get positive cash flow in Jacksonville,” he says.
Sprague allows that an investor can find positive cash flow in Palm Beach County, but only with a negative-amortization loan, in which the borrower trades a low monthly payment for a balance that grows. As plunging sales volumes show, most investors don’t feel comfortable with “neg-am” mortgages.
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Comments
By Boca Bob
June 26, 2006 03:54 PM | Link to this
Jax. ? huh? i moved here from west palm 1 year ago, its a hole a big redneck tabacoo swilling hole. nevermind the murder rate and violent crime rate is the highest in fla.
By rca
June 26, 2006 07:15 PM | Link to this
boca makes a point. jax is not a great place to live. it is only cheap.
By bobcat
June 26, 2006 08:09 PM | Link to this
So what, rca? Can the guy rent it and make money? Yes. So it’s a good deal.
Miami is worse for crime BTW.
By thumper
June 26, 2006 09:19 PM | Link to this
I will take JAX anyday,than Miami or Boca,at least they can speak english in Jax.
By rcaglass
June 26, 2006 11:07 PM | Link to this
be gone. M I A M I fools!
By Oscar De Low Renta
June 27, 2006 04:26 AM | Link to this
Maybe the jax rednecks will feel great about these slimeball investors coming into town and jacking up their prices so no one can afford to live.
By Patty
June 27, 2006 02:32 PM | Link to this
Hey Boca Bob….. I moved here to Jax 10 months ago. I lived in North Palm. I was in Palm Beach County for 14 years. As far as Jax “being a hole..” who do you hang out with? Im in R.E. here, and comissions have never been better. You must be on the North side. There is no more room to build in SO Fla. Maybe you should move back to “Boca Bob”
By Patty
June 27, 2006 03:31 PM | Link to this
I agree with Thumper
By Michele
June 28, 2006 06:57 AM | Link to this
I would be interested in networking with Jax Investors. I like the area, especially around St. Augustine…I think North East FL has great potential and cash flow is the key…
By Larry
June 28, 2006 08:38 AM | Link to this
I own 3 homes in Jax and have for about 4 years now. They are very low end sections and I have seen 0% appreciation and small positive cash flows on 2 and a negative cash flow of $200 on the 3rd. Maybe it’s better in the middle and upper end sections but it ain’t there in the cheap seats.
By Dave
June 30, 2006 06:08 PM | Link to this
Jacksonhole?????? I mean Jacksonville????
In addition to the all the rednecks up there aren’t there a lot of bible thumpers also?????
Actually there are some really nice neighborhoods (San Jose, San Marco, Bay Meadows, Ponte Vedra and other expensive beach areas) and last Spring when I looked around they weren’t cheap even compared to here.
There are defn. more bad areas than WPB but some real good ones too.
By Dave
June 30, 2006 06:12 PM | Link to this
One more tidbit on JAX or any other area that appears inexpensive compared to SOFLA:
Do your homework. Just because it is half the cost doesn’t necessarily mean it will go up like here. Market is going to correct everywhere and that $200K bargain may not sell again for that amount until the next real estate boom. Will it be next year, 10 yrs, 15??? All courtesy of rising interest rates!