Jeff,  in Miami, FL

Who here has purchased investment property in Miami? Can you tell me about your experience?

Asked by Jeff, Miami, FL Thu Jun 5, 2008

I have a couple of friends that want to invest in property here in Miami, but I've been hearing that the market is not quite ready yet. Should my friends hold off on investing until a later date?

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John Palmisano’s answer
Jeff, what type of investing are you speaking about? Buy and hold, buy and fix then sell, flipping. Single family homes, multifamily homes, apartment buildongs, or storage units. Anyway, you need to have a game plan first, this would include a timeline on how lonhg you would hold the property. What type of return you want on your investment. I have bought, sold, flipped, and owned single family and multifamily properties, mostly in Broward County. The market right now is prime and there are plenty of deals to be had. With that being said you also need to know what you are doing. Without knowing you or your specific plans for investing it is very difficult to give you a straight answer. I hope this helps more than it confuses you!

John Palmisano
Keller Williams Realty
Weston, Fl
1 vote Thank Flag Link Fri Jul 18, 2008
Dear Jeff,
You should hold off on buying commercial properties for a few more months. I cannot predict for sure, but I think that sellers will come down to realities of a "stabilized" market sooner than later.
Having said that, you can already find great deals to buy in Miami-Dade county if you are buying an apartment building. Retail will go down soon, Office went down a little, and Industrial is resilient with the first signs of weakness as of May-June, 2008.

Overall foreclosure rate for commercial properties is around 2.5% percent nationwide. It is not expected to go up that much unless U.S. economy tanks completely.

This low figure of foreclosures among commercial properties represents the type of loans that were secured (conduit, fixed amortized over 25-30, or other type of low risk loans). Unless it was a hard lender that gave a loan for a commerical contruction, no major foreclosures are going to be coming in commercial market anytime soon.

Overall returns on commercial properties will rise with interest rates going up. Right now, you can easily get 7% return day one on Apartmen buildings in Dade county 1 million dollars and up in price.

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0 votes Thank Flag Link Sun Jul 20, 2008
Wait another year, save another 20%.
0 votes Thank Flag Link Fri Jul 18, 2008
The time to buy is NOW. There are some good buys around, however, as far as "investment" it depends on what your goal is, how much money you are willing to "invest" and what you expect your return to be.
0 votes Thank Flag Link Thu Jun 19, 2008
Hi Jeff,
Now is a buyer market there is a lot of different offers for investments in the market they should beginning looking and see which one fit their expertise, if any question please contact me.
0 votes Thank Flag Link Fri Jun 13, 2008
Many are unsure if the time to invest in Miami (or any market) is right.

This is not a question that begs a 1-2-3 anwer. The simple answer is Maybe. The reason being is that, without knowing a bit about your and your friends predispositon to risk, any investment may be dangerous.

Ever had a surgery in which the surgeon told you there was a 100% survival rate and a 100% chance for no complications whatsoever? Unlikely.

Investing in anything, is no different. Investing in anything, requires paying attention, reading, attending lectures, clubs, courses, visiting the courthouse during auction sales (not to buy, but to observe), and teaming up with the right kinds of professionals that will help you get the job done.

After having done your homework, buying investment property in Miami becomes no different than learning the "ropes" around the first job you ever had. Remember that first day? That first week, month or year? Remember how much easier it began to get as time went by?

Actually, I found that, the average person begins to get bored with their job after 12-24 months, depending on the level of complexity, variety, etc.

Investing will be the same. At first, every thought and move you make will have to be deliberate and under the constant consultation of someone. As you gain confidence, you will begin to repeat patterns and shorten the time between deals (assuming you find this is in fact your passion and don't give it up).

Your first property should be simple and your exit should be clear. By your exit, I mean what you intend to do with it once acquired, in what period of time, and at what expected return?

Today, condos may be inexpensive in many areas and these typically afford people a number of advantages. But some of the disadvantages may include board restrictions, akward approval process or moving schedules, etc. Townhomes offer much more flexibility.

In the end, my opinion is that single family homes are among the best of the three for a number of reasons. In my opinion, these tend to collapse last during recesionary times and recover first during times of growth, while condos typically suffer first and lag in recovery. Then of course, are multi-family units.

Overall, once you decide which type of property to purchase, you discuss financing, how to take title, etc, you need to determine one more thing before you begin your search. How much work are you willing to do?

Are you only willing to plant a few pots, paint the exterior and exterior, clean the carpets and move on or are you willing to take a fire damaged home, one full of dead rats and termites, with mold and a leaky roof which you will proudly gut, re-wire, install new plumbing, roofing, kitchen, baths, etc?

In other words, will you consider only minor cosmetic work or can you do major rehabs? Are you familiar with techniques to negotiate with sellers, through investor friendly Realtors, can you obtain hard money financing, etc?

The time to do all this may sound biased coming from a Realtor of course but, listen up. Interest rates will not stay this low forever and neither will the prices you now see.

Depending on willingness to roll up your sleeves and get involved to learn, and on your exit strategy, buying real estate now becomes no more different than waiting for a department store sale to buy that thing you want so bad, or getting into that car you've been wanting to buy.

Now, real estate is on sale. Some people shop only during Macy's sale days, others only shop at fleamarkets. The choice is yours, but today, you can pick up a real bargain in an upscale place almost at fleamarket prices - if you know where to look, you know your numbers, you understand your risk levels and you know your exit strategies.

If you are not at all familiar with the business, visit or any other local investor club and attend their meetings. Team up with a professional Realtor familiar with the business and who can help you find property. Get your financing team in place, find out how you will taking title when buying property, how you will be handling expenses and profits, etc. Get an attorney and accountant on your team that understand these things, 1031 exchanges, find out about buying real estate and owning mortgage notes by using self-directed IRA instruments, in short, do your homework.

Remember, "Luck is when preparation meets opportunity" so, prepare and make your own luck!
0 votes Thank Flag Link Thu Jun 12, 2008
Hey Jeff,
I own two rental properties in Miami. My experience with the properties have been very favorable and they have had great appreciation. Your first response was great advice. As with any investment, do your numbers, know your return on investment and risk. With the pull back in prices there are some great opportunities to buy, but real estate is a long term investment! Part of this market crash is due to speculators/investors that jumped into purchasing home for quick appreciation with loans that did not make sense and they could not afford. Now the market is laiden with Short Sales and foreclosures driving the housing market down and obviously creating opportunities. Do you numbers, make sure the property covers with some reserves for repairs. If you find something that meets your investment criteria, Buy!
Regards, Frank
0 votes Thank Flag Link Fri Jun 6, 2008
Jeff, depends on the type of investment. I know this is a week answer but there are many factors you need to study in order to make an educated decision.
There are plenty of great deals in Miami - you need to study duration, location, type of property, returns and obviously risk.
You have people upside down right now that bought in pre-construction and are dumping properties. There are also people that need to move because of a relocation on personal issues. One person's misfortune may turn out to be another's gain.
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0 votes Thank Flag Link Thu Jun 5, 2008
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