How to find MFH properties in Miami/ lower Broward?

6 Replies

So this is basically my second post on BP. I've started to listen to podcasts and have been trolling here for a bit, learning tons!

But, I still don't have a good grasp on how to find good MFH properties in the Miami/ lower Broward area. I'm looking for a buy and hold MFH, probably around 4-6 units, but open to a slightly larger property. This will be my first investment property so don't want to bite off more than I can chew. I will not be house hacking, so am also limited in size of property and amount financed based on how much I can put down for 20% down payment. I've spoken with a couple of realtors, but haven't been impressed with them, they're just giving me some of the listings I see online. I keep looking online at loopnet and realtor.com, but the asking prices are way too high. Any ideas of how to find good properties or any off market properties? Can try direct mail, but I thought that was more effective for SFH. Don't really see any for sale signs out when driving around. Any ideas?

Any input would be much appreciated!!

Thanks!!!

Daniel

@Daniel Heller Your Multifamily Down Payment depends on several factors: the total number of units, how you wish to close, the amount of personal liability you wish to assume, etc. Buying a Duplex, TriPlex, or a Four Plex can qualify, for Conventional Financing. Multifamily Properties housing five or more units qualify, for Commercial Lending Terms only that will be explained below.

I want to focus on single unit Properties (SFRs) and 2-4 Unit Properties (Duplex, TriPlex, or a Four Plex), since this is what may Local Investors focus upon. Many of these Investors do not consider the short and long term ramifications, of their Financing Decisions. Many Realtors will suggest purchasing a property using a FHA Loan, to reduce your out of pocket money. If the property requires rehab, the Realtor and/ or Mortgage Broker will suggest applying, for a 203k Loan. A 203k Loan is where the purchase price and rehab costs are rolled into a single loan.

Assuming you have a respectable FICO you can buy, with a FHA Loan (3-5% down, a 30 year amortization schedule, and a residential loan rate). Because you closed personally, you will not have Asset Protection, in the form of closing in the name of a LLC. What happens if one of your tenants has a slip and fall, on your property, or something else happens to them? You are on the hook and can be personally sued, for everything you own. Some people will say, "Take out a quality Insurance Policy and you will be protected." Ambulance chasing attorneys know their way around and can legally navigate around Insurance Policies. Another downside is you loose on the advantages, of the Federal Tax Code, by not closing in the name of a LLC.

If you want to close in the name of a LLC, Mortgage Lenders will offer you Commercial Loan Terms (25-30% down, a 15-25 year amortization, and a ballon due in 5-7 years). This is what I am encountering, in the current Mortgage Industry.

If you think you will go FHA, 203k, etc. and then Quit Claim the property, to a LLC, or a Land Trust you run the risk of the lender discovering a Title Transfer occurred and activating the "Acceleration Clause" or "Due on Sale Clause" that requires the loan to be paid in full, within 'x' number of days. These clauses are contained, in all Promissory Notes nowadays.

Many Realtors and/ or Mortgage Brokers will not tell you this information. Many, but not ALL are only focused on the commissions he/ she will earn and not focused, on your best interests. You many be asking yourself what can I do? Locate a Motivated Seller that will consider Seller Financing. You may have to put more money down (10-15%), but you can close, in a LLC, with no worries about banks. I have a lengthy Legal Opinion, from my seasoned Legal Team regarding this matter.

You are correct that 2-4 Unit Properties are over priced. These type of properties are Comped the same way SFRs are Comped. Properties containing five or more units are Comped based on the Net Operating Income (NOI). Why not consider seeking Motivated Sellers that may be more flexible on their price and/ or Seller willing to consider Seller Financing.

I hope you find value, in the above information.

@Daniel Heller - South Florida is an incredibly competitive market - especially for MFH. The good MLS deals are under contract the same day they are listed. The others may become good deals some day, but require months and months of consistent follow up to snag them when they become good deals.

If you're looking for off market deals, the main ways to get them are either: 1) link up with wholesalers who have off market deals or 2) source your own off market deals the same way other investors and wholesalers would source their own deals. 

@Daniel Heller There is an abundance of information here on BP regarding marketing for deals. I would suggest starting here - https://www.biggerpockets.com/renewsblog/category/real-estate-marketing/ - and then searching the forums for any specific questions you might have and topics you are interested in investigating further. 

I know exactly how you feel. I actually got my real estate license to start investing in the Miami/Broward area. I started looking 2 years ago but realtors always gave me the run around so I decided to get the license to cut that out and do it myself. I love the responses because I'm learning along the way and the different loans and liabilities that come with them can be tricky to understand.... It's true that the best MFH will get listed today and gone tomorrow. Time to get my A game on!