First Multifamily Looking in South Florida

[Danielle Lynch]

Hi guys,
My first bigger pockets post. I own 3 long term rentals in Chicago and I am looking to buy my first multifamily in south Florida. Does anyone have recommendations on cities they are investing in Florida that are currently working? Do you think I have to start with 2-5 units or just analyze the numbers and try to scale up to more doors (which is my goal at this point). I have $500K liquid and another $400k in stocks I could pull out if I find a deal I can't pass up. Thank you in advance for any help!

[Devin Peterson]

Quote from @Danielle Lynch:

Hi guys,
My first bigger pockets post. I own 3 long term rentals in Chicago and I am looking to buy my first multifamily in south Florida. Does anyone have recommendations on cities they are investing in Florida that are currently working? Do you think I have to start with 2-5 units or just analyze the numbers and try to scale up to more doors (which is my goal at this point). I have $500K liquid and another $400k in stocks I could pull out if I find a deal I can't pass up. Thank you in advance for any help!

 Hey Danielle,

Would love to connect with you! Florida is a fantastic state to get involved with, especially for STR. Miami, Tampa, st. Pete, Orlando - all markets I have lived in / worked in for quite some time now. All have great opportunities depending what you're looking for.

[Kristina Kuba]

@Danielle Lynch

If you are looking to scale up you likely need a multi unit that will quickly appreciate so you can borrow against or 1031 it into a bigger unit size. I would highly recommend you look at Tampa. Time magazine recently ranked Tampa as one of the best cities in the world. We are also seeing multiple offers come back in certain neighborhoods, especially in the urban core.

Time names Tampa on ‘World’s Greatest Places’ list

Reach out if you have any questions. Best of luck!

[Ray Hage]

Quote from @Danielle Lynch:

Hi guys,
My first bigger pockets post. I own 3 long term rentals in Chicago and I am looking to buy my first multifamily in south Florida. Does anyone have recommendations on cities they are investing in Florida that are currently working? Do you think I have to start with 2-5 units or just analyze the numbers and try to scale up to more doors (which is my goal at this point). I have $500K liquid and another $400k in stocks I could pull out if I find a deal I can't pass up. Thank you in advance for any help!

 Hi @Danielle Lynch, I am an investor (with 3 multi-unit properties) here in South Florida and also a Realtor. At the moment, I believe your best bet are some cities in Broward and Palm Beach. Generally speaking, Miami's prices are a bit too high to have a decent cashflow at the moment. If you'd like to connect over the phone, I should have some free time this afternoon. 500k liquid is plenty enough to get started but don't sell your stocks just yet. Let's find the right deal first.

[Ash Hegde]

Rents have gone up quite a bit across south Florida, but I agree with Ray that Broward and Palm Beach are going to cash flow better in general. 

[David Collier Jr]

Watch your insurance costs and get your quotes fast during inspection. If the asset needs updating etc you may be severely limited in carrier options until upgrades are made. Flat roofs, old roof age, old electrical, cast iron plumbing and non impact openings will mean much higher premiums. 

Also certain distances from the ocean and/or flood zones can drastically increase premiums. Insurance alone can have a big impact on cash flows. Cash obviously means you have no need to carry windstorm. I see a lot of that here as insurance cost can throw a deal off. 

I own two duplexes in Pompano Beach and pay $7k per duplex in ins with new plumbing, new AC, newer roofs and all impact windows/doors. Remove any of those updates and it would be higher. Also taxes are to be considered. Guesstimate is around 1.5%. 

[Patrick Drury]

@Danielle Lynch   
Regardless of the market you decide to go with in Flordia start with a 2-4 unit and build your team and then scale from there. 

[Clay Asplundh]

If you want to invest in multifamily in South Florida, cash flow will be hard to come on the MLS unless you are investing in very undesirable neighborhoods. However there is a case to be made that rents will continue to grow, and the area continues to see more and more development as the population and job opportunities continue to grow. I am in West Palm Beach and would recommend finding a multifamily property that you can operate units as a short term rental, as it would have much better potential to positively cash flow and also allow you to buy in nicer neighborhoods. Feel free to reach out if you have any questions.

[Luis Maqueira]

Find a local expert,

If you have the right team you have 50% advantage. My group buys and hold properties. 

Invest mean do your homework no after you buy the property. Each city has is own ordinances from code and violations enforcement to yes Airbnb (short-term rental or not).

Then you need the best management company is the blood of you business. They should be able to provide rent and prevent maintenance. 

Then you are ready to find properties but you  need to know how to underwrite,  don't expect a person to give you a deal. They just give you a list of properties to buy. 

Good luck 

you are in the best place to gather information Bigger Pockets,

[Manny Del Val]

Hi @Danielle Lynch

I am an investor, a realtor, and lived in South Florida for over 30 years. The South Florida market is tough but it's not impossible to cash flow. Areas in Broward and Palm Beach are going to cash flow more than other places. I would look at Miramar, Hollywood, Dania Beach, Lake Worth, West Palm Beach. You want to look for C+ to B- neighborhoods and Class C buildings where you can do some value add to get higher rents and increase your NOI.

I would advise that you start small 2-4 units and once you have a solid team then move into the commercial space.  If I can be of any help please feel free to reach out.

Hope that helps

Manny 

[Jon Parker]

Danielle,

To contrary belief, starting small is actually riskier in the RE investment space. For example if you have a duplex and 1 tenant moves out or stops paying rent you're going from 100% occupied to 50% in the snap of the fingers. 1 AC goes out or the roof needs to be replaced? Kiss your net cash flow gone for minimum 1 year on those smaller deals. If you have $900k to invest, I would focus on at least 10 units, ideally closer to 20 units. Being it's your first deal, it's going to be harder getting debt options and you don't want to be over leveraged anyways so $900k should equate to a max $2m deal. For this budget I would target affordable housing pockets in Miami like Little Havana or North Miami inland suburbs. Miami has become one of the most expensive cities to live in, yet we need housing options for the workers that keep the city moving. You'll never be vacant and you'll be able to raise rents yearly since you'll be bridging the gap of affordability. I'm happy to discuss more as we provide consulting. We are a full service investments and development company. Happy to assist. Thanks

[Enzo Di Palma]

Hi Danielle,

I'm a realtor and specialize in short-term rental (STR) investment properties, and I'd be happy to offer some insights for your investment plans in South Florida. Based on my experience, I strongly believe that investing in a Hollywood property with a pool can provide the best overall return on investment (ROI) and speculative value growth in the area. Here are some factors to consider:

High Demand: Hollywood, Florida, is a popular tourist destination with beautiful beaches and a vibrant entertainment scene. The demand for short-term rentals in this area is generally high, especially properties with desirable amenities like a pool. This can lead to higher occupancy rates and rental income potential.

STR Potential: The short-term rental market in South Florida is thriving, and Hollywood is well-positioned to attract vacationers and business travelers. By leveraging platforms like Airbnb or VRBO, you can capitalize on the tourist market and potentially generate higher rental income compared to traditional long-term rentals.

Speculative Value Growth: Hollywood has seen significant development and revitalization in recent years, with ongoing infrastructure improvements and new attractions. This can contribute to potential appreciation in property values, allowing you to benefit from both rental income and future price appreciation.

As for the type of property and scaling your investment, it depends on your personal goals and risk tolerance. Starting with 2-5 units can be a good way to gain experience and diversify your rental income sources. It also allows for easier management and potentially lower entry costs. However, if you analyze the numbers and find a larger multifamily property that aligns with your investment strategy and goals, scaling up to more doors can be a viable option.

Considering your available capital, including $500K liquid and $400K in stocks, you have a strong financial position to pursue opportunities in South Florida. It's crucial to conduct thorough market research, analyze potential properties, and evaluate their financial performance, including cash flow, cap rates, and projected returns.

I recommend working with a local realtor familiar with the South Florida market to help you navigate the area, identify suitable properties, and provide guidance based on your investment objectives.

If you have any further questions or need additional assistance, please feel free to ask. Good luck!

[Hans Waisfeld]

hello Danielle! did you already buy a property? I am very interested to know what you were able to find in south florida.

let us know!
thank you

Hans

[Neil P.]

@Hans Waisfeld same here please keep me in the loop .

[Ace Goodrich]

Quote from @Ray Hage:

Quote from @Danielle Lynch:

Hi guys,
My first bigger pockets post. I own 3 long term rentals in Chicago and I am looking to buy my first multifamily in south Florida. Does anyone have recommendations on cities they are investing in Florida that are currently working? Do you think I have to start with 2-5 units or just analyze the numbers and try to scale up to more doors (which is my goal at this point). I have $500K liquid and another $400k in stocks I could pull out if I find a deal I can't pass up. Thank you in advance for any help!

 Hi @Danielle Lynch, I am an investor (with 3 multi-unit properties) here in South Florida and also a Realtor. At the moment, I believe your best bet are some cities in Broward and Palm Beach. Generally speaking, Miami's prices are a bit too high to have a decent cashflow at the moment. If you'd like to connect over the phone, I should have some free time this afternoon. 500k liquid is plenty enough to get started but don't sell your stocks just yet. Let's find the right deal first.

 Agreed.  There are absolute buys every time I open my email.  Even with very risk-averse settings.  

Reach out of you need anything.  Happy to help. 

[Darnell Lockett]

Hi @Danielle Lynch. I'm just curious if you ever find the right deal for your first purchase in South FL. If you did...awesome! If you haven't, I'm in Miami and can tell you that its a pretty expensive market. There are opportunities as you move further north to Palm Beach and beyond. 2-5 units are perfect imo. You can use a DSCR loan to purchase them.

[Zack Mutnik]

Hey I see you posted this 10 months ago. What did you end up doing? I’m in a similar situation up in Broward. 

[Ray Hage]

Quote from @Zack Mutnik:

Hey I see you posted this 10 months ago. What did you end up doing? I’m in a similar situation up in Broward. 

 Hey that's a good situation to be in. There are still decent deals out there even in Broward and WPB but I don't see any homeruns. Lot of singles and doubles though. If you want to chat about it, it's a good time now as rates will be going down in a few months and there will be a few more sharks out there buying up everything. 

[Jordan Ray]

Quote from @Danielle Lynch:

Hi guys,
My first bigger pockets post. I own 3 long term rentals in Chicago and I am looking to buy my first multifamily in south Florida. Does anyone have recommendations on cities they are investing in Florida that are currently working? Do you think I have to start with 2-5 units or just analyze the numbers and try to scale up to more doors (which is my goal at this point). I have $500K liquid and another $400k in stocks I could pull out if I find a deal I can't pass up. Thank you in advance for any help!

 @Danielle Lynch What did you decide on?

@Devin Peterson @Ray Hage Would love to connect about opportunities. 

[Danielle Lynch]

It's hard to make deals pencil right now. I live in Fort Lauderdale. Can't rationalize 4.5% cap rates borrowing at 6-7% interest rates. I personally like the Chicago market where I've been. Their cap rates are around 6.5%. I am starting to consider buying a deal for cash now while prices are low and then refinancing or selling once prices go up. The main issue here is the insurance problem

[Robert Rixer]

Chicago is definitely an underrated market for multifamily. Florida has the tailwinds but people are overpaying and driving prices too high. Chicago has headwinds but many are staying away causing prices to be actually pretty good for buyers. 

[Jonathan Klemm]

Hey @Danielle Lynch - Just curious...how come you do want to keep investing in Chicago?

Personally, I love the investing community here so it's hard to think about investing anywhere else until there aren't any buildings left to renovate.

I have a good friend in St. Petersburg / Tampa @Dustin Baldwin who would be a great connection for you.  Happy to make an intro.

[Jamie Parker]

Quote from @Danielle Lynch:

Hi guys,
My first bigger pockets post. I own 3 long term rentals in Chicago and I am looking to buy my first multifamily in south Florida. Does anyone have recommendations on cities they are investing in Florida that are currently working? Do you think I have to start with 2-5 units or just analyze the numbers and try to scale up to more doors (which is my goal at this point). I have $500K liquid and another $400k in stocks I could pull out if I find a deal I can't pass up. Thank you in advance for any help!

Hello Danielle,

How is it going with multifamily in south florida? 

[Melanie P.]

Are you failing in Chicago? Why do you want to stop investing there? Where are you based?

Chicago has far better investment opportunities and it makes sense to keep building on the processes that work, if they are working...