All Forum Posts by: Michael Gorey

Miami Single Family Homes under $300,000. - https://myre.io/0TdHLyWKoPJm

I heard this the other day..."Don't wait to buy real estate. Buy real estate and wait."

Thanks for the comments and questions, Ecaterina. You asks a lot of questions some answers of which were provided in the discussion thread. Some of your questions seem beyond the scope of this discussion, but I will try my best to address your questions.

Growing new inventory, this is a fact as everyone can see in Miami the amount of new high rise apartment / condo construction is staggering. This topic warrants its own discussion. This discussion was intended to focus on a potentially overlooked market of older buildings in prime locations. Condos in new buildings are often considerably outside the price range of these older buildings. Just as new construction in single family is often higher that older homes in the same neighborhood. 

Depreciation of older buildings vs growing new inventory, I would like have more clarification on what you meant by this comment. Are you talking about tax deprecation? If you can provide more specifics to this question it may be relevant to the topic of this forum. 

Upcoming assessments toward building renovations, I agree assessments to building that have neglected to properly maintain the building can be a pending burden. As previously commented in this discussion, I strongly recommend that buyers do the necessary due diligence to identify a building and condo board that has maintained and passed all required inspections. My example is one such building that has passed it's 40 year inspection and has maintained the building. 100% agreed the buyers should research all public records before purchase; including, building code records, outstanding violations, open permits and the condo board meeting minutes, ect. 

Big buildings decrease rent if economy slows down, When you say, "if the economy slows down" do you mean if demand for housing in Miami slows down? Or are you job growth, inflation rates, interest rates, or? Can you provide more clarification on this question? Also provide more clarification on an example of when "big buildings have decreased rents"? Perhaps this would be another separate discussion on it's own. I will say that based on my experience, older buildings are more affordable for the renter. The older buildings are generally located in prime areas but do not offer all the amenities of larger buildings. Also generally speaking, zoning restrictions where low-rise buildings are located prohibit high rise development. For example, East of Alton Road in Miami Beach vs. West of Alton Road. 

What areas in Miami are we talking about, My example in the discussion was for Miami Beach. 

Again, thank you for your comments. I am looking forward to your follow up...

Hi Kevin, Thanks for the comment. You have to do your own analysis based on your ability to fund. The BP has excellent tools to run the numbers on investment returns. Different investors have different goals so this scenario may not be your best option. I have been listening to the recent episodes of BP REAL ESTATE podcasts and they have been talking more and more about benefits to investors beyond immediate cash flow. It is a very interesting discussion on the podcast...I don't know if you have been following. What kind of cash flow return are you looking to target?

Here is an update after a recent visit to a building in South Beach Miami, FL. I confirmed with the HOA president that the building has passed it's 40-year inspection and had no violations. I also walked the property at this location and found it to me in excellent condition. Periodic maintenance has been done and the building has been well maintained. The board president also told me that the HOA has reserve funds. Several units are for sale here one is asking $295,000. for a 1/1 at 650 sq ft. This includes 1 off-street parking spot - which is very desirable in South Beach) HOA is $802 and taxes (with no exemptions) are $3192. I did a quick search for rent and this unit would rent for around $2500 per month. I know that this may not be for everyone but would like to encourage discussion on this as a potential investment. Thanks in advance for your comments.....

Ashley, This is a great question. My name is Michael, a Licensed Flordia State Real Estate Agent.  I am not in your market, but I can offer some advice as someone who has personally bought and sold homes in other states. The truth is that you can do a lot of your research yourself and online. The popular real estate websites make searching an area very easy. So you can educate yourself to the specific neighborhood and home in the price range you are looking for. At the same time, I encourage you to interview several agents and ask them tough questions. Bring the hard questions you have uncovered while doing your research. Test their knowledge against what you have learned. Then you can get a feel for the best agent for you and your needs. The goal here is to get the best partner for your home purchase. You can work with multiple agents (many buyers do) but you may not get the best results. Interviewing multiple agents and committing to the best one for you will give you a greater return on your time investment. That agent will know your goals and become part of your process from start to close. In my experience, the buyer's agent I interviewed and hired became vested in my goals and needs as compared to an agent who didn't know me. 

**A tip when interviewing a potential buyer's agent, ask the agent about the conditions for commission compensation when the seller is not offering full commission percentage to the buyer's agent. Due to recent changes in commission rates, many buyer's agents are asking the buyer (you) to pay the difference in commission compensation. It is a hard conversation for a buyer's agent to have with a potential client so they may not call your attention to this unless you specifically ask.**

Hope this helps! All the best. 

Just a quick tip for anyone managing construction projects on your own. This is something I learned building out 3 different beauty salons. Scheduling the individual trades persons ie. plumbers, electricians and ect. is best when you have a full day of work for each trade. Most trades do not like to come to a site to do one task and then come back another day to do other small tasks. From their perspective, they need to manage travel and set up time to protect their profits. This is counter to how the job may need to work for you. For example, maybe you want to plumb the kitchen while the bathroom is being framed. The plumber will give you the best price if they can do all the plumbing in one day rather than two separate days. The takeaway is to manage your project and book your trades in full days for the best price. 

Quote from @Javier Mercado:

What do you think about the new reserve law for HOAs? Are low rises exempt from the requirement? If so then it could be a solid brrr strategy. I'm finding the HOA fees getting bumped especially in the older buildings to keep up with the new requirement.

It’ll obviously take a good team to help strategize exits due to the challenging financing on the backend for the end user. 

Demand is still insane with net migration upwards of 250k/yr for the entire state of Florida, Miami is a big chunk of that.

Good luck on the pitch

Thanks for the comments....According to Miami Herald reports July 22, 2021, "Miami-Dade and Broward are the only counties in Florida that require aging high-rises to get reinspected once they hit 40, and every 10 years after. Exempt in Miami-Dade are single-family homes, duplexes, and buildings with a capacity of 10 or fewer occupants that are 2,000 square feet or less."  My opinion is that the new laws for HOA reserves are well intended and I hope help in the long run. You bring up a good point about HOA reserves as it is a "top of the list" concern and should be researched carefully. No one wants to pay higher HOA fees but if the fees are too low then the board will not have sufficient funds for preventative maintenance. When I consider a potential "Older Low Rise Condo" in the Miami Dade area strongly recommend that the buyer confirm that the building has passed the 40-year Certification. Additionally, I look at building code violations and or recent permits issued for the building. All this info is public data and strongly recommended due diligence.

Quote from @Kevin S.:

What price range are theses condos you referring to? I have looked away from condos because many of theses condos HOA fees are exorbitant, not to mention HOA rules and regulations when it comes to renting. Many do not allow renting for the first year. Can you share some numbers your clients are benefiting that will sway my interest towards condos? By numbers I meant by, say, condo appreciation is/was better than SFH, Cash flow is better than SFH, more demand than SFH, anything. Thanks in advance.

Thanks for your interest in my post. Good questions. I jumped on the MLS just now and see one condo in Miami Gardens for $125,000 and the listing claims that the current tenant is paying $1200 per month. It also claims low Association Fees ($254). To your point about rental restrictions, each building has different rules and restrictions that need to be researched to determine which properties would work for your goals. Obviously, you would want to consider condos that did not have the rental restrictions you are concerned about. The intent of my post was to share this idea with those interested as an option to consider. It was not intended to represent that investment in the older "low-rise" condos are better investment compared to other options. Each investor has his/her own goals combined with their own considerations for investment. This point of view would require additional research and due diligence to determine what is best you. If you are considering the Maimi market - please lets discuss this further. 

I wanted to share some thoughts I have been developing for my clients regarding potential investment opportunities in older low-rise condos in Miami, Florida. Investing in older low-rise condos in Miami, Florida, is often overlooked in favor of newer developments; however, these properties offer unique advantages for investors.

LOWER ENTRY PRICE – Older low-rise condos provide investors with the opportunity to enter the Miami real estate market at a relatively lower price point compared to newer luxury developments. This affordability factor, combined with the potential for long-term appreciation and steady rental income, makes older low-rise condos a compelling investment choice for savvy investors looking to diversify their portfolio in Miami's real estate landscape.

BUILD EQUITY – Investing in older low-rise condos also allows investors to capitalize on potential renovation opportunities. With strategic upgrades and modernization efforts, these properties can be transformed into sought-after residences, thereby increasing their value and rental potential.

LOCATION, LOCATION, LOCATION – These Condos are often in prime locations in established neighborhoods, providing a sense of authenticity and charm that appeals to both residents and tourists.

DEMAND – The Miami Migration is still going strong as reported by the Miami Association of Realtors, “Migration into Southeast Florida remains strong. In 2023, 153,347 driver licenses were exchanged for a Florida license in the counties of Miami-Dade, Broward, Palm Beach, and Martin, up 8.3% from the level in 2022 (141,621). New York, New Jersey, and California continue to be the market’s top feeder states.” (MIAMI REALTORS.COM / January 2024)

I will continue to update this post with new developments and input from the community. Thanks in advance for your comments and thoughts.