Hello All, I'm looking to invest in multifamily property in FL. I have a few multifamilies in MA but want to try the FL market, any suggestions? where to focus? what price point/cap rate to expect? I greatly appreciated! Thank you
There's not a lot for sale on the MLS, but Brevard county is a great place right now. So many engineers/scientists that work in the area, so people are able to afford higher rent. Look in Melbourne (32901/32925) or Palm Bay (I generally look in 32905 since it's close to the river, but you can go further with 32907, 32909) for people that work in Melbourne, or Cape Canaveral, Titusville, Cocoa (close to the river, not inland) for people that work at CCAFS/KSC. You can also look on the barrier island, but your returns won't be as high.
From a macro level, we are syndicating larger MF in Tampa, Jacksonville and Orlando. There's 450,000 apartments units across these 3 metros. All 3 ranked top ten for MF in U.S. Outside of Texas where we have a lot of properties, Florida appeals to us as the #2 market for in migration last 3 years according to U-Haul. In Jacksonville, we are on the southside where we are seeing the city move out towards. In Orlando, we're in the Winter Park area with good schools as a few submarkets examples we like.
Hi David, you have probably seen that Lakeland, FL is a popular investment city these days, some of the reasons for this is that Polk County/Lakeland is ideally located centrally to Orlando and Tampa, we have many warehouses strategically located throughout Polk County, to include warehouses for Amazon, IKEA, RoomsToGo, PepsiCo and Publix which make this area strategic for distribution throughout Florida, something else worth mentioning Amazon is building one of their major Air Hubs at the Lakeland Airport, they will be taking over 47 acres to service their planes, not to mention Publix is headquartered in Lakeland, and we also have a large presence for Coca Cola bottling and Juices in Auburndale, FL which is about 10-20 min from Lakeland.
Lakeland is also home to the yearly SUN 'n FUN held in April, which is Florida's largest annual convention, which spans over 6 days on 2200 acres, and it has been recorded to have had a $64 Million direct and indirect economic impact on the I-4 corridor (From Tampa to Orlando). https://www.flysnf.org/about/
I have been investing since 2002, and my investments are mainly in Lakeland, Bartow, Auburndale and Winter Haven, I also like Lake Wales and Haines City, there is good population growth, and high demand for workers in these areas, of course keep in mind we are in a pretty descent economy right now, whatever you look at, make sure the numbers make sense, and if you purchase something, leave enough room for an economic downturn, I see many outside investors purchasing at higher than normal prices, because the prices seem cheap compared to other markets close to Lakeland, but this can become a trap if the market shifts in a negative direction.
I’ve done many deals north of Orlando, Jacksonville, Pensacola, Miami, St. Petersburg, Tampa, Fort Lauderdale and the Space Coast.
From a deal perspective, most of these markets finance on similar terms. I am speaking from an agency platform. Deal size by value plays a role in how these markets are determined, of course along with sponsor requirements, underwriting, etc.
Finding a killer deal is great, financing a killer deal is sometimes challenging.
An example my comment regarding deal size dictating terms. Through the SBL programs 75% on an acquisition in Pensacola is usually achievable. Going pure conventional at 75% is challenging and even more so if the sponsor does not have any experience. This has to do with risk appetite and how the SBL and Conventional programs are structured.
Depending on how you’re structuring your deals. Markets that lend themselves to 80% financing (pending an underwrite) are markets like Jacksonville, Tampa, Orlando and Miami. This assumes the SBL program, which is far more “check-the-box” and move on versus conventional, where more eyes are on a deal.
Prepay is a whole conversation and will depend on exit, who your investors, length of hold, cash-flow management, desired interest-only period, appetite for locking down knowns versus unknowns, etc..
Florida is a great market and it’s wise to shop markets with an idea of what is achievable from a debt placement perspective.
Of course, bridge money is also good route depending on how the property is operating and the plans for re-positioning.