Starting out and I hate my area (Miami Fl) I'll explain why.

21 Replies

Hi, my name is Jason and BP is the best thing that has happened to me through hard times. I got sick and had to miss work for... 8 weeks now. Found BP about 3 weeks ago and I can't stop reading forums, watching YouTube videos, and analyzing properties. To give you a quick background. I have come into some decent money and I'm feeling like I'm going to pull the trigger in the next month or 2 when I find the right deal. I've overwhelmed my local area and come to terms with Miami is and area that is overpriced and run down. Don't get me wrong, there are deals everywhere but there are many parts that are pretty grimy.I'm afraid to go out further than 50 miles but I am coming to terms with the nature of the the beast. I need to move out of my comfort zone and pull further out. 

Question 1 - Do you guys recommend pulling away from Miami or sticking around?

I've also been hearing that more units the better. I was looking at buying 2 properties (8 unit and 4 unit) in the Gainesville area. 

Question 2 - Should I hit up more units or stick to quad or below?

Last question - I was looking at some properties out of state that were really good but do you guys recommend at least staying in state or if the price is right just get a good property manager and run with it?

Any help you guys can provide I will very much appreciate.

Hey @Jason Schimer

I think this is an excellent post. I hope more experienced investors chime in but I'll give my two cents. Also, sorry to hear that you have been sick, but, great to hear that you have found BP!

Question 1- I don't know the Miami area, but I would recommend sticking close to your area in general. For your first deal or two, it's nice to be able to have a short drive to go and look at the property in person and not rely on a PM (Property Manager) do to the job. Since it would be local, you know the areas that are "grimy" and what areas that may be worth investing/avoiding.

Question 1.5- Since you didn't give it a number, I'll call it 1.5. When it comes to how many units, that completely depends on what your goals are. Do you want to focus on cashflow properties? If so, then more units per property tends to make more since. Do you want to own property that will appreciate more over time? If so, then single family houses (SFH) are most likely a better way to go. To me, I like both. I think it is a good idea to have both. It greatly depends on your market, though. I think the BRRR method is an excellent way to get a great deal and keep a cashflowing property.

Question 2- For your first property (or couple properties) I would suggest staying away from 5+ units. They are considered commercial and are a completely different beast. But, it all comes down to your own comfort level, your market, and the deals you find.

Question 3 (last question)- I already gave my 2 cents on whether or not to stay in your area. That said, I'm looking at properties that area about 45 minutes to an hour from me. I know the area just as well and the market I'm looking at is better (a lot better) than my local market. 

I'd just like to say that I am answering these questions from what I have learned and not from my personal experience. I'm still very new to the game but I have learned a ton since starting. Please feel free to send me message! Hope this helps,

Dakoda

I wanted to say thanks for giving me your time and knowledge. Definitely worth more than 2 cents. After I that post yesterday I went back onto loopnet and I'm going to try to be open minded to Miami-West Palm Beach. I extended to and hour and thirty min drive. My goals are to have the ultimate goal - quantity with cash flow. Dreams do come true right...

Jason

Some cities are more prone to boom/bust cycles than others.  I think the most important factor is the length of time between an observable supply shortage and new supply coming onto market. 

Some cities have higher (and longer) regulatory burdens than others. Miami, with its unique ecological situation, is in this category.

Some cities have no raw land, so they must build up. Residential towers take a lot longer to build than SFR. Miami is out of raw land (the everglades and the ocean aren't going anywhere)

Both factors combine to create a Miami real estate market that is much more volatile than other cities. If you can't find anything that makes sense, maybe the market is experiencing an unsustainable shortage right now. Eventually builders will build more sqft in the city, and that oversupply will send prices crashing back down to an equilibrium level (or overshoot to become cheaper than equilibrium)

I haven't looked at Miami in a long time, and I don't have a sense for what the situation is right now, but I'd listen to whatever the numbers were telling me rather than force it.

Thanks Scott, what your saying makes complete sense. I bought a single family for 150k and there are cookie cutter homes in my neighborhood going for 215k and some slightly bigger for 235k. Prices move every which way very quickly. Oh yeah this is my 3rd year in this house. If you go into the city everything is vertical. Then if you go east he prices are insane cause you're moving closer to south Miami (south beach). The only way is to go north for me. I'm looking as far as west palm beach. This would be an hour and a half drive. I look at where some projects are and I want to get out of dodge. If you have any recommendations please throw them my way. I'm soaking up any knowledge I can get my hands on. Thank you for the comment.

Jason

Go where the money is, and invent/steal systems to manage it.

Go as big as possible 

I am from Miami, now in Atlanta, GA area.  I would say to you to look at the numbers.  If it makes sense then pull the trigger.  I would start small so that I can make all my mistakes (learning opportunities) at the beginning.  As you ramp up and acquire more properties you hopefully would have learned more be able to fine thing

....to continue my post... Hopefully you will be able to fine tune your business model.

Sorry, typing on phone app and it saved it automatically before I completed my thought.

@Jason Schimer I have 2 investors from Miami that do Full time investing in Atlanta....I can always give them your number and you can network with them....The 1 investor I actually bought a deal from and he is making things happen....

Hello @Jason Schimer , glad to hear you are utilizing BP to increase your knowledge.  I think it all depends on where you are getting your deals from.  If you are sourcing your own deals, you can find deals ANYWHERE, you just have to be at the right place at the right time.  

Also if it's going to be  your first foray into real estate investing, buying somewhere far can be an issue.  If you buy somewhere local you can keep an eye on it, or go inspect the property very easily, etc.  

The south Florida area is SOO big that even if you want to pull out of Miami, Broward and Palm Beach are overflowing with properties.  Feel free to message me if you have any questions!  best of luck

Greater Miami will ALWAYS have property to buy! The biggest factor will be your risk tolerance. Personally, I buy for cash flow - I don't buy anything smaller than duplexes. With an SFR, you're either 100% occupied, or 100% vacant. There's no wiggle room. Period. With MFs, duplex, tri, or quad, there's a 50/50, 33/33/33, or 25/25/25/25 chance that you can pay your monthly bills. As your rents increase (either from making repairs, or market fluctuations), your value goes up. BUT, you can STILL cover your monthly expenses if you plan it right.

Good luck!

@Benjamin Pekarek i agree that miami is a booming location but with that the prices are insanely inflated. especially with MF. anything worth getting is insanely expensive or in a neighborhood that i wouldn't walk through at certain times of the night... I'm not here to complain, I'm hear to figure out alternatives and solutions. You are right though. sometimes the single family are more stable when you do find a good tenant. maybe a good duplex with 2/1 per unit would be ideal. 

@Robin Maza thank you for the opportunity to ask questions. I'm going to call you when i need a good connection. 

@Jason Schimer I agree with what @Robin Maza has said. There are deals everywhere you just have to keep looking. If the only place you are looking is on the MLS you are probably not going to find a deal. You have to think outside the box. Find neighborhoods that you like that have MF's in them. Find the owners and call them. Your best friend will be a for rent sign in the front yard. Call it! Ask the owner if he would like to sell the property. If he doesn't. Does he have another property that he wants to sell? If you call and it's a PM company ask them if the owner would like to sell or if they know any other owners who would like to sell? The PM could make a commission from the sale so they would be willing to help you in most cases. It's a numbers game. Get used to hearing NO. If you are a good talker you can still get good info from the owners that will help you along the way. You might even find a mentor out of it. It might take you a year of repeating this process to find one good deal but its worth it. It only cost you some time on the phone. This is how I find deals. I just talk to people. As far as your first couple properties go, they should be local. There is something to be said about managing your own properties for awhile. The experience will help you when you're ready to find a PM to take over your properties so you can sit on the beach and drink pina coladas. Hope this helps.

I'm a Native Floridian and Investor friendly Realtor from South Florida. Don't be disouraged. Be mindfull of your market. This is FLORIDA! South Florida to be exact, deals are here you may have to multiply your search efforts. Are you using Bird dogs, Investor friendly Realtors, and Foreclosure court sales? Miami-Dade County is one of if not the largest county on South Florida. There are millions of homes. To me the lower priced properties(deals) are further south towards Homestead. Just some of my observations. Feel free to Pm me if have any questions.

I am a hard money lender here in South Florida and I am getting a lot of borrowers finding excellent deals in the Homestead area. Going North and expanding your radius is great but I wouldn't completely rule out going south.

Hey @Jason Schimer

The rental market in South Florida is very strong so staying local could work to your advantage if your goal is buy property, hold and rent. Most times I show a tenant a rental in Miami they have to make a decision on the spot or the unit will get a contract on it. It's been like this for awhile now.

Also those grimy areas you mentioned could be up next for revitalization. You just have to check with city and municipal planning to see what is coming down the road. Once you have that information you can buy and hold in these areas before developers come in and start investing.

I remember areas like Edgewater, Overton, Wynnwood, and Little Haiti were neighborhoods you did not want to live in some years ago. Now these areas have become trendy and desirable places for young millennial professionals to live and hang out.  

As far as the high cost for buying properties. You will have to think creatively and buy them in distress. It won't be easy. You just have to be creative on how you aquire them.

How does the rental market in Broward compare to Miami ?

@Mark Weinstock browsed is cheaper for sure but just like anywhere you have to look at the area. just to give you guys a heads up. i found a realtor that was my coworker. i can trust her and i feel pretty good that she won't commission hunt on me. by pure luck her brother 20 years ago bought 2 SF and 2 quadplex and he retired a while back just living off the rent. he has been buying and selling other homes for flips. he has decades of experience. hoping he will throw some knowledge my way. there is a light at the end of the tunnel.

@Jason Schimer

Miami, FLis an extremely challenging market to invest in, and knowing all about the different neighbrhoods, dynamic market trends, emerging areas and prices down to the sq/ft for every zip code will make you succeed in Miami.

I just did a 100% cash on cash ROI in Miami, FL in 92 days for a duplex in Little River area of Miami. You can check out the detailed case study below. Those deals are hard to find, but they are out there.

@Jason Schimer

Curious and encouraging minds want to know! Did you end up finding a property? The one thing I've learned from BP is that no matter what location you choose... run the numbers. 

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