I. About Brevard County – The Space Coast of Florida
Brevard County is a county in the state of Florida. As of the 2010 census, the population was 543,376, making it the 10th largest county in Florida. The official county seat has been located in Titusville since 1894. Brevard County comprises the Palm Bay–Melbourne–Titusville, FL Metropolitan Statistical Area. It is located along the east Florida coast along the Atlantic Ocean.
Influenced by the presence of the John F. Kennedy Space Center, Brevard County is also known as the Space Coast. As such, it was designated with the telephone area code 321, as in 3-2-1 liftoff. The county is named after Theodore Washington Brevard, an early settler, and state comptroller.
II. How We Ended Up Here
Kelly and I had been visiting the Disney Vacation Club resort at Vero Beach at least annually since 2003. The resort is just south of Brevard County, about 30 miles from Melbourne Beach, Florida on A1A. We loved the area but never thought much about investing or working there.
Rena Smith, who has worked with us for almost 15 years relocated to West Melbourne, Florida in 2009. Rena helped us with our Springfield, Ohio REO division assisting with Broker Price Opinions from her home office both when she lived in Springfield and in Florida. We did not make the connection until 2014 that Rena and her husband Craig had relocated just north of Vero Beach. Craig transferred to the Space Coast area with PNC bank.
Once I took a closer look at the Melbourne area the more impressed I was. This area got hit hard during the recession but bounced back like very few other areas in the country did. Craig did extensive research on the area before agreeing to transfer with PNC. All in all, I know of no place in Florida I would rather be building a business. We seriously got to work when Rena earned her Florida Real Estate Sales Person license in early 2015.
The median home value in Brevard County is $164,900. Brevard County home values have gone up 10.6% over the past year and Zillow predicts they will rise 4.8% within the next year.
IV. Our Plans
Melbourne, Florida is a great place for our current and future clients to expand their portfolio of rental properties. As of August 2019, we have 20 or so properties under management and expect to expand this business rapidly just as we have in Ohio. We will have a licensed property manager(s) on the ground in Florida but will continue to run our accounting operations from our offices in Springfield, Ohio.
V. Case Studies of Properties under Management
At this time our owners are treating their investments as rental properties but an attractive alternative for many of our clients will be to sell these homes via land contract. Both the rental market and land contract markets are hot due to the number of people moving into the area. Many of these people are not yet in a position to obtain a mortgage and therefore welcome the option of a land contract.
For each of the case studies below, I am showing both a rental scenario and a land contract scenario. I am using what I consider very conservative figures. You will see that insurance costs are estimated higher due to our proximity to the coast, but property taxes are in line, or even less than, what we see in Ohio.
The land contract exit strategy is a terrific option for many investors that could have a positive impact on their income tax liability. The land contract strategy also allows the investor to ‘lock-in’ anticipated appreciation gains with a buyer now. For the buyer, at the end of the two or three-year term, the final ‘purchase’ can be treated as a refinance which is often easier and quicker than a new purchase mortgage.
We have had great success marketing land contract purchases in Ohio for various clients by using all the marketing and screening tools we have developed over the years for our rental clients. Rently boxes, www.ROOSTRentals.com, Zillow, Facebook, and Appfolio have made the process of marketing, advertising, showing, and screening applications a routine process that just works. We have all of these tools in place in Florida right now.
Zillow.com has the last 12 months appreciation trend in the area at just under 11%. The home Kelly and I purchased in Melbourne 2015 has appreciated by 50% in the last 4 years. I use a 6% appreciation rate in my case studies. I think that is an appropriately conservative approach.
Case Study 1
Case Study 2
Case Study 3
Case Study 4
Case Study 5
VI. Vacation Property Management via AirBNB
We are also moving slowly into vacation property rentals. We are working with an owner of a home on Cocoa Beach that will rent weekly during peak seasons and monthly in the off-season. Cocoa Beach is very interesting because of its proximity to Orlando and its theme parks. Cocoa Beach is aggressively marketing itself as “Orlando’s Beach”. Once we work the kinks out of this new operation we will begin expanding the service in 2020.
VII. Brevard County/City Information
From the Melbourne Regional Chamber of Commerce Website:
Brevard County is located on the east coast of Central Florida just 35 miles east of Orlando, and home to such businesses as Harris, GE, NASA and the Kennedy Space Center, the only facility in the world that launched the Space Shuttle; Port Canaveral, the second-busiest cruise port in the world; 72 miles of beautiful Atlantic Ocean beaches; and the largest collection of endangered wildlife and plants in the continental United States. With its tropical weather, cultural activities, educational opportunities, active and passive recreation options, high-technology industries, and family-friendly atmosphere, the Space Coast offers an exceptional quality of life that residents and visitors enjoy year-round. With a small-town feel and catering to the Florida lifestyle, it’s no wonder more than 500,000 people call its16 municipalities and unincorporated areas “home.”
Brevard County is known to many residents as the Space Coast for its link with NASA and the Kennedy Space Center. Since the retiring of the Space Shuttle, the question remains: what will happen with the Space Program? In addition to the rockets that launch periodically, plans are in the works for a new spacecraft coined the Orion. It will be a heavy-lift rocket that will propel astronauts into the deeper reaches of space. Expected to be completed by 2017, Orion will be the future of our space program. Until that time residents, as well as visitors alike, can still gain access to the rich history of our country’s space program by visiting the Kennedy Space Center.
If golf is your passion, Brevard County is sprinkled with many excellent public golf courses at affordable prices. If golf isn’t your idea of fun, the Space Coast Stadium is the proud home of the Brevard County Manatees; our very own minor league baseball team. In addition to housing the Manatees, the stadium also hosts spring training for the Washington Nationals. Some other great outdoor area activities include; boating, jet skiing, airboat rides, parasailing, fishing, diving, surfing, eco-adventures, kayaking, horseback riding and much more. The Brevard Zoo and Forever Florida are also great options as it’s family-friendly and provides great views of Florida wildlife.
Are you looking to shop? You will find that antiquing, farmers markets, art festivals and street parties are home to many of our downtown districts from Titusville to Port Canaveral and Eau Gallie to Melbourne. If you are looking for that one-of-a-kind shopping opportunity then you must visit the world-famous Ron Jon Surf Shop in Cocoa Beach offering an assortment of surf and beach gear. But if mainstream shopping is what you prefer there are many shopping centers scattered from Palm Bay to Viera and beyond.
Brevard County provides the community and visitors to the area with many cultural opportunities throughout the year. The Maxwell C. King Center has a live theater, Broadway shows, and concerts throughout the year as well as summertime children’s programs. You can also find exciting entertainment at The Cocoa Village Playhouse or The Henagar Center in Melbourne. If you are a country music fan you may want to plan to attend the 3-day Runaway Country Festival that is held in the spring of the year at Wickham Park.
Whatever you’re looking for we hope you’ll find it here in Brevard County. We think you just might be surprised by the treasures you’ll find!
VIII. Why Florida is Primed to Stand Out in the New Commercial Space Race
By Matthew Richardson. The Orlando Business Journal July 15, 2016
On a clear, sunny morning on June 15, a crowd of people, young and old, gathered at the top of Exploration Tower at Cape Canaveral to view the launch of SpaceX’s Falcon 9 rocket. “What direction should we look?” asked one teen. “Don’t worry, you’ll see it when it launches,” someone replied.
A moment later, a large plume of white smoke and orange flames appeared at a distance, as the rocket rose in the sky. The crowd focused their cameras, phones and tablet devices to the sky, hoping to get a good shot of the spacecraft. While the rocket was miles away, viewers could feel the rumble of the blast in their chest.
“We drove from Largo to see this launch,” said Sandra Sapien, 57, as she held her 3-year-old grandson. Although Sapien has seen eight launches in total — her first when she was 12 — she and her family traveled nearly three hours to catch the activity. “There are more launches than there used to be when I was younger, and it’s more of a rush now to share it with my husband and grandson. It’s history in the making.”
More launches, indeed. It seems every month, there at least two launches. June had three launches, and by the end of 2016, 30 launches will have taken place — an amount not seen on the Space Coast since the 1960s.
While tourists were cheering as the rocket disappeared into the clouds, business owners in the area likely were thankful for the boost in business the launches bring. After all, business in Brevard Country fell off drastically when NASA’s space shuttle program ended in 2011, resulting in more than 8,000 job cuts in the area. But now, a new economic behemoth is awakening in the form of commercial space launches, and Florida is primed for its growth.
In fact, Florida is racing with Texas and California, among others, to see which state will take the lead in calling the shots for commercial space launches, and the big economic impact that accompanies rocket manufacturing plus space exploration and space tourism.
This special report explores what the Florida Space Coast has to offer, what other states are doing and which of those states Florida is watching closely and why.
IX. Rebuilding Florida’s Space Coast
Frank DiBello has been watching rockets take off for decades: “There was an added edge when humans were on board, but the activity today is just as important, as it brings on innovation and business diversity.” For DiBello, business diversity is an important issue. That’s because the area had put all of its eggs in one basket — NASA, with many local manufacturers gathering work orders from the organization — and those eggs all were crushed at once when the shuttle program ended.
“When I took the job as president of Space Florida in 2008, we knew the shuttle program was going to retire and this would be the second or third time Florida was going to be hit hard from a program being canceled,” DiBello said. “We never developed a broad industry, so we set a goal in 2009 to diversify the space industry and build a deep supply chain.”
Brevard County and Space Florida, the agency charged with growing the state’s space industry, noticed a greater opportunity to rebuild — focusing more on commercial launches rather government-funded projects. And doing so has paid off.
Today, 75 percent of the $300 billion space industry is from commercial space programs. “That is one reason we want Florida to be the global leader in space commerce,” DiBello said. “We don’t want to be solely dependent on federal programs.”
Right now, Florida has a head start to be the leader in the commercial space industry.
Eric Stallmer, president of Commercial Spaceflight Federation, based in Washington, D.C., said Florida is at the forefront of the industry for three reasons:
- History: Florida has a nearly 70-year history of rocket launches, spearheading well-known programs like Apollo, which saw 13 Saturn V rocket launches; Skylab, which put the Skylab space station into orbit; and the space shuttle program, which had its first launch in 1981. By 2011, the space shuttle program in Cape Canaveral had 135 launches. This helps build up Florida’s reputation as a place already primed for operations and creates a cluster of firms that can support the launches in terms of materials and services.
- Infrastructure: The Kennedy Space Center has about 700 facilities grouped across 144,000 acres, including the 525-foot-tall vehicle assembly building for stacking NASA’s largest rockets. Since the retiring of the space shuttle program, much of the NASA space is being used by local tech and manufacturing firms.
- Support: Before the retirement of the space shuttle program, the Kennedy Space Center housed 15,000 employees. That number has dropped to 8,500, but the center still functions as the main support for rocket companies, offering one of its many launch pads for commercial launches. Because of its history, the Space Coast already is outfitted with the proper control centers to handle major launches.
“Florida has the advantage of having large established facilities,” Stallmer said. “There is obviously Kennedy Space Center, but Cecil Spaceport [in Jacksonville] is another exciting option for firms interested in horizontal suborbital launch vehicles.”
Those advantages are the reason Brevard County is experiencing a rapid expansion for high-tech and aerospace-related companies.
For instance, Brevard County and the Economic Development Commission of Florida’s Space Coast are in talks with a high-tech engineering and design company under the codename Project Marathon to expand in Melbourne. If the company selects Central Florida, it would create 327 engineering jobs by the end of 2020, paying an average annual wage of $64,356. Those jobs, in turn, would lead to 370 spin-off jobs. Greg Weiner, senior director of business development for the Space Coast EDC, said the firm’s final decision will be announced sometime this month.
Project Marathon is just one way the Space Coast is diversifying its business:
- Blue Origin, which broke ground on its $205 million rocket manufacturing facility in June, will create 330 jobs that pay an average annual wage of $89,000.
- OneWeb announced in April that it will build a $36 million satellite factory that will create 250 jobs with an average annual salary of $65,579.
- Aircraft manufacturer Embraer opened its Legacy jet assembly plant in Melbourne on June 2, which will create 600 jobs with an average annual pay of $55,000.
- Northrop Grumman is developing a 500,000-square-foot plant in Melbourne that will create 3,470 direct and indirect jobs.
Central Florida schools also are helping boost the talent thousands of local aerospace and aviation companies need to grow their firms.
For example, Daytona’s Embry-Riddle Aeronautical University has nearly 30,000 students mastering their craft in aeronautical science, aerospace engineering, civil engineering, commercial space operations and more.
Embry-Riddle’s 3-year-old commercial space operations degree program is seeing “explosive growth,” said Justin Karl, assistant professor for the program, which has 130 students, a number expected to grow to hundreds more.
“We had multiple contacts from individuals in the commercial space industry who expressed the need for a workforce they didn’t need to retrain. This program helps solve that problem,” Karl said.
And last year, Aviation Week magazine named the University of Central Florida the No. 1 U.S. supplier of employees for the aerospace and defense industry. UCF’s College of Engineering & Computer Science has more than 9,000 students.
However, Florida’s legacy of NASA is a double-edged sword when it comes to the commercial space race.
“It’s a blessing and a curse,” DiBello said. “We have a 50-year history of federal government processing, and that needs to evolve to be commercially responsive. As other places are developing spaceport capabilities, they will not be saddled with the history of federal grounding, but they can build from the ground up to be commercially responsive.” Still, the region’s history, infrastructure, support, talent and location are major reasons it stands out, as well.
“Canaveral is an ideal location because it is close to the equator and launch vehicle providers can take advantage of the Earth’s spin by launching eastward,” Stallmer said. “As long as NASA continues to partner with commercial companies, people will continue to flock to Florida’s Space Coast.”
X. Edging out the competition
However, just as Florida is focusing on the commercial space business, other states want a piece of the action, too. “Multiple states, aside from Florida, are involved in many facets of the commercial space industry,” Stallmer said.
For example, there is a significant presence in Washington state — particularly in the Seattle region — as well as in California, Texas, Colorado and Alabama. In addition, New Mexico and Arizona have activity, too.
Currently, there are eight states with spaceports in various stages of operation: Florida, Alaska, Texas, Georgia, California, Oklahoma, Virginia and New Mexico.
While none has had as many launches as Florida — California has had two in the past five years — Florida ranks No. 3 in aerospace and aviation employment with 85,044 workers, compared to California (168,774) and Texas (131,652), according to Enterprise Florida.
Further breaking that down, Florida is No. 8 in the U.S. for number of aerospace engineers, with 2,400. The top three spots are held by California (12,950), Washington (8,620) and Texas (6,500).
Those numbers don’t surprise Dale Ketcham, Space Florida’s chief of strategic alliances. He said while Texas does not have any rocket launches yet, the Johnson Space Center in Houston houses plenty of engineers to help man the mission control center, which takes up nearly 1,700 acres. Texas is moving into rocket launches, too, thanks to a deal with SpaceX.
“An experienced, educated workforce is critical, as well as support from state governments, tax incentives and indemnification laws,” Stallmer said.
For example, Texas convinced SpaceX to build its private spaceport in the southeast corner of the state near Brownsville “by providing extensive tax incentives,” he said.
Ohio, while it lacks launches, is another contender, having 4,850 aerospace engineers. NASA’s Glenn Research Center in Brook Park, Ohio, does not have any launch pads but houses 3,400 employees on its 350-acre facility.
“Our legacy is big, too,” said Frank Jennings, spokesman for the Glenn Research Facility. “We have more astronauts than any state in the country.” The research facility’s major role is to test NASA technology, but it also serves as support for smaller companies to use its equipment. “For aerospace companies that may not have the budget for a major facility, they come to NASA to use our space,” Jennings said.
Ohio also boosted itself as a top place for aerospace and aviation manufacturing by forming a committee in 2014 called Ohio Aerospace & Aviation Technology. The organization brings together industry experts to develop a statewide strategy on how to grow the business. And it’s working.
Ohio ranked as the No. 3 most attractive state for aerospace and aviation manufacturing by PwC’s U.S. 2015 Aerospace Manufacturing Attractiveness Rankings.
Meanwhile, Washington boasts 1,350 aerospace-related companies, and it builds 1,400 aircraft and unmanned aircraft systems a year, including nearly 700 commercial and military jets. Boeing has a major presence in the state, as well.
So, who’s winning the space race? Some experts say Florida stands the best chance to lead the pack. “Florida has been dominating in space for a long time and rightfully so,” said John Thornquist, director of aerospace for Washington State Department of Commerce.
“Logistics would be really important for a rocket company. While there is a large presence here on the West Coast, companies may want to be closer to the area that launches rockets to avoid the trouble of transporting such big devices across the country.”
But experts also don’t feel the need to compare the states, claiming any area that’s building in the industry is a win for everyone.
“This is not a pie we are trying to piece out,” Thornquist said “All of the states will feel an economic impact. [Washington] works to create the spacecraft, and Florida launches them.”
Micah Walter-Range, director of research and analysis for Space Foundation in Colorado, added that competing states “are trying to improve their competitiveness and that’s great for America. If you are looking at launch site and manufacturing plants, success in one area will lead to a lot of different growth in other areas.”
XI. Launching the future
In the midst of the burgeoning commercial space race now underway in Florida and other states, Central Florida businesses are watching with great interest as the industry growth draws other players into the region.
Take Carol Craig, CEO of aerospace and defense manufacturing company Craig Technologies. As she drives past Exploration Park on the Space Coast, she sees a large, empty plot of land with a bulldozer pushing around dirt.
It’s clearing out space that later will be a buzzing business area filled with engineers ready to roll out the newest rocket that will ferry astronauts to space and possibly let tourists experience the feeling weightlessness for minutes in Earth’s lower orbit before landing safely on the surface.
“Blue Origin is building this big facility, and it’s nothing Brevard County has seen before,” she said. “Once these things are built, it’s a light in the tunnel for these manufacturers. Five years from now, this place will be booming.”
Currently, the Space Coast has four active launch pads and will activate another in the next decade to launch NASA’s Space Launch System.
Once those additional launch pads are ready, DiBello said three rocket launches a month will be nothing compared to what he has in mind. “I’m looking at an era today where we will have 30 launches a year, but I’m also looking 10 years out when we will have 100 to 200 launches. In the future, I want there to be a launch every day.”
XII. By the numbers
66,980: Number of U.S. aerospace engineers, who earn an average annual wage of $110,570
10,370: Number of U.S. atmospheric and space scientists, who earn an average annual wage of $90,210
10,890: Number of U.S. atmospheric Earth, marine and space sciences college teachers, who earn an average annual wage of $92,540
Source: U.S. Bureau of Labor Statistics
XIII. Come Visit!
If you would like more information about investing in the Space Coast please call me at 844-806-6577 or email me at Chris@ROOSTRealEstateCo.com. We always welcome visitors and are eager to show you around. I think you will be as excited about the prospects here as I am.
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