News

Any condo/investment rec's from you locals?

Discussion in 'Florida' started by JimSchad, Mar 4, 2004.

  1. JimSchad

    JimSchad Guest

    Somebody on here sent me to a website for florida condos about 9 months ago. Don't remember who it was or the web site. It had an artist's rendition of the place. All glass I think, kind of emerald greenish and maybe 15 stories tall facing the water. Wasn't in Miami, was more towards Tallahassee or Sarasota in the panhandle of the state I think.

    Looking for new developments to get in a preconstruction buy for "cheap".

    Any leads are appreciated as I don't know the areas very well at all. They all look beautiful so hard to know about the invisible lines people won't cross to buy or live.
     
  2. To remove this ad click here.

  3. Cavallino Motors

    Cavallino Motors F1 World Champ
    Lifetime Rossa

    May 31, 2001
    14,143
    Florida or Argentina
    Full Name:
    Martin W.
    Jim,
    being in the biz trust me when I tell you don't even think about it now. First there is nothing cheap. Cheap never has been in pre-construction. Yes, there has been people making a lot of money but the market is just so over inflated that they could\. Just like the .coms this bubble will burst and it will likely be soon.
    Any investment in pre-construction you do right now is a high-risk investment. Be prepared to own what you invest in and be prepared to close on a unit. Likely you will have to and that can come at a price.

    If you are interested still, call my wife. Her brokerage deals a lot with pre-construction. Her office is one of the top offices in Miami Beach and yes, she owns it, is successful and is good looking :) (ask Jerry :))

    Dynamic Realty Group
    305-868-0505 #106
    Marion Ott

    www.2Miami.com
     
  4. JimSchad

    JimSchad Guest

    Thanks Martin,
    I've seen pics of your wife and I'd buy anything she is selling :)
    Was talking to a gentleman in another thread about making some money on condos..pre construction and holding for year or two then selling or possibly buying the pre construction contract then flip to owner occupant prior to close. I have stayed away from these because I don't fully understand them, but seems lots of folks are doing it and making money. I will assume you are correct in that the market is inflated and perhaps close to a bust.

    So what "DO" you suggest I look into? Not office space. I am interested in apt complexes too, but they are a bit pricey to get into unless you want a small, old unit.

    Thanks!
     
  5. Cavallino Motors

    Cavallino Motors F1 World Champ
    Lifetime Rossa

    May 31, 2001
    14,143
    Florida or Argentina
    Full Name:
    Martin W.
    Jim,
    that sounds like people talking in 1999. They all make Millions in the Dot Coms. Today they pack your bags at Walmart.

    You make money when you cash out, not before. Before it is net-worth, which can fluctuate significantly as the market goes.

    As I said, whatever you buy today buy it only if you are prepared to hold it when time to close comes by. If it makes negative cash flow stay away, and yes, there is nothing out there like that.

    I am paying huge taxes this year in capital gains because I can not get 1031 replacements. Put the money in he bank and wait till all the guys that lost their shirts in the stock market a few years back lose their shirt in the real estate market. Buy when the demand to sell is high, sell when the demand to buy in high!
     
  6. Eric308gtsiqv

    Eric308gtsiqv Formula 3

    Nov 26, 2001
    1,952
    Orange Park, Florida
    Full Name:
    Eric Eiland
    Very good and solid advice Martin!
     
  7. To remove this ad click here.

  8. Ksullender

    Ksullender Formula Junior

    Sep 3, 2003
    883
    USA
    Basically buy low, sell high?
     
  9. ILuv4Res

    ILuv4Res F1 Veteran
    Lifetime Rossa Owner

    Aug 8, 2002
    6,507
    Full Name:
    Fred
    Jim,

    FYI, most developers now require the contracted party to close on the purchase. You can not just flip your contract. Additionally, usually the developers require you to use their closing agent, making it very difficult to conduct a simultanous closing. Therefore, you will usually have to close, then close again with your buyer. This equals closing costs 2x that need to be included in your financial analysis.

    No one knows for sure if it's 'too late' to jump in. I can, however, tell you that the sales prices here don't allow for a positive cash flow rental model at the current marketplace. Only the end user (who's not looking at it strictly as an investment, instead it's a residence) can justify current pricing.
     
  10. BartonWorkman

    BartonWorkman F1 Veteran
    Sponsor

    Nov 3, 2003
    5,799
    En El 305
    Full Name:
    Barton Workman
    I should be writing all this down...

    Scrambling for a pen!

    BHW
     
  11. JimSchad

    JimSchad Guest

    Here in Dallas there are 5 houses on every street for sale and the rental market per cnnfn is one of the hardest hit in the nation..vacancies at 12% or more. Very hard to make any money on single family residence rentals.

    However, builders building new houses as fast as they can. Some bargains out there, but usually forclosures or a run down house. Currently I am buying cheapo houses in the slums of dallas and rehabbing selling. Most recent example: bought for 18,500...here is a pic....put almost 20,000 into it so close to 40K total. Sell for 63k to 67k. Net about 19K when done. Try to net about 10k to 15k avg. However, when I hear about these guys making 300k on a single transaction it makes my 10k seem like chump change....so I am trying to see what the next opportunity is BEFORE it happens.

    Any suggestions?
     
  12. To remove this ad click here.

  13. RAMMER

    RAMMER Formula 3

    Feb 20, 2004
    1,160
    Miami
    Full Name:
    Rammer
    Jim this house seems to need more like $120,000 worth of work....So your doing a great job if you fixed and sold it investing 20k. Martin and the rest of the guys are right. I live in West Kendall Florida about 20-30 mins. from the heart of Miami. This area is flowing with new construction and 3 years ago one could have purchased (preconstruction) small 1600Sq foot homes on 60 x 100 foot lots for 140k and larger ones over 3,000 sq feet on slightly larger lots for under 230k. Any person who bought a house then has seen an increase of 100-150k on their purchase price. I should have bought the whole block! Now things have changed....the cheapest new preconstruction home you can find in the area is around 280k! I have also seen some subdivisions littered with with homes wating to be flipped by investors who got in a little too late and are trying to sell for 10k profit after buying for over 240 k. In conclusion, preconstruction in this area is over and while some people believe the real estate market will burst I doubt it. Miami is a great city to live in and we are just running out of space to build on and I dont think prices will ever come down......only slow down. Just my 2 cents.
     
  14. Robin

    Robin F1 Rookie

    Nov 1, 2003
    2,893
    Arlington, VA
    Hm... this is a toughie. I've been thinking about buying some places here in Tampa just for long term rentals. Not looking to flip anything or make huge monthly cashflow.. just a portfolio building exercise looking at long term gains toward retirement. Property values here are so low that new and pre-construction homes can be had for practically nothing. It's hard to imagine the prices dropping any lower. In the neighborhood I just bought in, home values already seem to have jumped about 20% in the last year. The developer is now building a bigger version of this neighborhood a bit farther out... Pre-construction prices are a lot lower than where I'm at now due to it being farther from the city, so it seems like a decent place to get started.

    I'm not sure what the prospects are for vacancy rates, how much rent you could get, etc. A few homes in my neighborhood seemed to have rented out in no time. What's a good source for finding this kind of data? I'm thinking about meeting with some local property managers to get a sense for the market, but I have a feeling they'll pump it up just to get business from me. Opinions, advice?

    -R
     
  15. Cavallino Motors

    Cavallino Motors F1 World Champ
    Lifetime Rossa

    May 31, 2001
    14,143
    Florida or Argentina
    Full Name:
    Martin W.
    Jim,
    you are actually making that money ($15K) whereas pre-construction is a hypothetical gain until you can actually flip.

    Your own words, every 5th house is for sale. rental market has been hit hardest.

    What makes you think that in Florida people make more money or have more jobs making the rental mar=ket more stable.
    I had a $250,000 Condo on the beach that I could not rent for $ 1400. Updated, very nice, oceanfront building, 1150sq ft.
    Ended up selling it making a small profit but that could have easily backfired.

    Continue doing what you are doing. You are doing fine!
    If you try to do what others have done in the last years you are the guy that buys Enron at super high, having been told that others (still holding stocks) have "made" so much money in Enron. You buy it, you go broke, and the guy who never cashed out is broke now too, not just his "profit \" is gone but also his investment.

    Learn from cycles and do them the other way around and you will get rich. There is no get rich quick. Not in Real Estate. it takes time, properties need to mature. Just buy smart.

    What you do in TX is great. I would do the same if I could find those here.

    Martin
     
  16. Cavallino Motors

    Cavallino Motors F1 World Champ
    Lifetime Rossa

    May 31, 2001
    14,143
    Florida or Argentina
    Full Name:
    Martin W.
    I guess I just talked my wife out of a commission :)

    Damn, here goes my new Ferrari :)
     
  17. tatcat

    tatcat F1 Veteran
    Silver Subscribed Owner

    Sep 3, 2001
    8,135
    panama city beach FL
    Full Name:
    rick c

    get in you car go east on 10 and stop in panama city beach. it's the emerald coast you're thinking about. there are about 8 new condos going up now and like 5 or 6 more having those pre construction sales. ground floor stuff right now. forget the peninsula. ask frank parker. he'll rent you his beach house over in cape san blas.
     
  18. JimSchad

    JimSchad Guest

    So what IS the approach now?
    Rental houses are bad.
    Condos are over inflated and hard to rent.
    Office space is too abundant.
    Retail space just scares me unless it is new construction.


    Seems from what I read that all the real growth that companies are looking for is going to be in China and India. How does that affect us here? Or rather what would you buy/not buy.

    Just trying to take advantage of a downturn in the economy and pick up some bargains if possible.
     
  19. chefrobear

    chefrobear Formula Junior

    Mar 6, 2002
    463
    cravanzana, Italia
    Full Name:
    Robert Ginsberg
    Just my 2 cents. Scripps institute is building a east coast facility in north western Palm Beach county. That's going to add Thousands of needed jobs. Area's like the Acreage, Palm Beach Gardens and Royal Palm Beach are seeing real estate booms which they say are going to continue. Homes are going up every where. Good time to look into The area for rentals I would think. Alot of people are transferring from California and the institute is working in conjunction with Florida Atlantic U.
     
  20. ILuv4Res

    ILuv4Res F1 Veteran
    Lifetime Rossa Owner

    Aug 8, 2002
    6,507
    Full Name:
    Fred
    Jim,

    What's the issue?????

    <Most recent example: bought for 18,500...here is a pic....put almost 20,000 into it so close to 40K total. Sell for 63k to 67k. Net about 19K when done.>

    You've got to be kidding me???? Invest a total of about $40k, net almost a 50% return???? Lots of simmilar type deals??? This is a joke right???? This is NON EXISTANT here in south Florida. Here, the norm is to invest at least $100-150k and HOPE for a $10-20k profit (maybee 10%, if that).

    I suggest you continue doing what you're doing if what you posted is true. Additionally, keep this to yourself......With profit margins like that, it's only a matter of time before the investors come crawling into your area. Enjoy it while you can!!! My only suggestion is to BUY MORE!!!
     
  21. JimSchad

    JimSchad Guest

    Yeah Fred, it's true. But you are right there are getting to be too many investors and everyone flipping houses to another investor for a small markup so finding the deals is getting harder. I just bought 2 more..1 for 25k and another for 29k, first one needs about 14k work the second needs 8k work. First one sell for maybe 60k and second one for bout 58k. Now not all that spread is profit. I am using my own cash for the rehabs, but borrowing from a hard money lender for the purchase price...4 points and 14%, but it allows you to leverage your money. The annualized returns is usually over 200%.

    I am using this method to generate some cash to plunk into more passive things like apt complexes. This stuff is very hands on and with a real day job it is starting to be too much. Trying to do 20 of them by end of year.

    I know a guy who did 45 last year and another who did 60 and another who did about 50+ a year for 3 or 4 years..he now just loans out his money.
     
  22. Cavallino Motors

    Cavallino Motors F1 World Champ
    Lifetime Rossa

    May 31, 2001
    14,143
    Florida or Argentina
    Full Name:
    Martin W.
    I am moving to Dallas :)
     
  23. Texas Forever

    Texas Forever Four Time F1 World Champ
    Rossa Subscribed

    Apr 28, 2003
    44,712
    Texas!
    Jim, FWIW, I'm originally from the panhandle area of Florida, and I was recently talking with a fairly well connected attorney in Pensacola. He told me that the projections are for 6 million people to move into the area between Pensacola and Mobile within the next 15 years or so, all retirees or second home people. The area between Pensacola and Panama City has already gone nutso.

    What's the reason for the boom? Cheap waterfront, at least compared to South Florida. Traditionally, the Panhandle has alwasy been cheaper because it gets cold in the winter, unlike South Florida. However, the next wave of retirees don't really care about this because they are not really into water sports. They like the views, the slow pace of life, and the fact that the area is relatively cheap.

    Are the condos are good investment? Some are, most not. Waterfront is the best, but very pricey to buy. It is sold by the front foot and goes for $5k a front foot on the bayside to over $10k a foot on the Gulf.

    My recommendation? I'd stick to buying trailer homes in DFW. I just meet a guy yesterday who now owns over 2,000 units. He had to install a very big mailbox!

    Dr "Dirt Dobber" Tax




     
  24. ILuv4Res

    ILuv4Res F1 Veteran
    Lifetime Rossa Owner

    Aug 8, 2002
    6,507
    Full Name:
    Fred
    Martin, I'll meet you there!

    Jim, I can tell you from experience, owning apartments is DEFINITELY not passive!!! If you can continue doing what you're doing, and pocketing huge returns like you are, keep doing it!! There's no reason to reinvent the wheel if it rolls smoothly! Focus on doing MORE of what you're doing, then you can be just like the guy who loans out money you mentioned.

    As far as juggling the day job with the RE investments, try to keep it going as long as possible. Live well below your means and sock away some money to start your 'real life' in a few years.

    Perhaps after saving enough, you can finance your own deals without the hard money. Additionally, as more investors flock to those deals, then you can lend them money.

    That's my plan.............


    :)
     
  25. Cavallino Motors

    Cavallino Motors F1 World Champ
    Lifetime Rossa

    May 31, 2001
    14,143
    Florida or Argentina
    Full Name:
    Martin W.
    ...and don't forget who your Ferrari connection is when you make all that money :)
     
  26. JimSchad

    JimSchad Guest

    Yeah I hear ya. I've got a partner and we have enough cash to finance our own deals, but the return goes from something like 75% to over 200% by borrowing. Of course it is more workload as we can technically buy more houses so who knows. Still pretty new at it. Only done 2 of them so far so not like I'm making millions!

    Apartments could be passive if I use property mgt company..assuming they do their job correctly. Is that not the case? I'm not saying I never want a phone call with questions, but I don't want to be the fixit man either or collecting rent. I am looking at a 8 unit place right now. We'll see how that goes.

    We were at Ferrari of Dallas the other day looking at this 512TR and my biz partner says..."funny we could just write a check for this thing if we wanted to" I say "company car!" and we both laugh. Someday I will!!!!!!!
     
  27. SWFLMike

    SWFLMike Rookie

    Mar 11, 2004
    21
    Ft. Myers
    How does that work? I figure anytime you borrow, it's just more debt.

    I'm still new to...well, almost everything being discussed in this thread, but I'd like to know a bit (lot) more.

    That's what I'm working on right now, but how hard is it to work the job and other stuff on the side? Right now my biggest problem is that my first job out of school is with a company that's in really bad shape. It's just a bit of a delay, really, but I wish I had known about it before I got involved.

    -Mike
     
  28. ILuv4Res

    ILuv4Res F1 Veteran
    Lifetime Rossa Owner

    Aug 8, 2002
    6,507
    Full Name:
    Fred
    Mike, when you borrow, you leverage your position so the rate of return is higher. For example, pay cash $100k and make a $20k profit is a 20% return. Now suppose instead, you put down $20k and had someone else put up the other $80k to buy the $100k investment. Now, the $20k profit is a 100% return on your $20k investment. Of course, I left out the cost of borrowing the money to make this simplistic. But, now let's add that factor. Even if your interest rate on the $80k is 10%, in one year that's $8k additional cost. Now you end up with $12k profit ($20k profit minus the $8k cost of money) on the $20k investment. This is a 60% return. Yes, you pay for borrowing, but the 60% return is better than the 20% return using all cash.

    It's very hard to work everything at once. It takes a lot of working hours instead of having lots of fun times. This gets back to life choices and goals.
     

Share This Page