More Millionaires were made through real estate...
I can assure you, making a 5% to 7% cap rate and dealing with tenants is NOT a way to BECOME a Millionaire. It’s where investors who are already millionaires *might* park their money with a good property manager, to keep (diversify) their money.
If you’re new to real estate, and want to be successful in South FL:
1) know where we are in the cycle and buy right, your money is made on the purchase, not the sale.
2) know your neighborhood and values
3) be thinking about an exit strategy, what’s your “make me move” price.
(And this is coming from a buy and hold investor...)
4) and last, get a good return (aka, cap rate) for your holding period.
Because, the South Florida market, sell prices fluctuate so wildly compared to relatively stable cash flow markets like the mid-west.
Cap rate is very important, but here in S. FL, it can be swamped by price moves.
Example. I bought a condo in Coral Springs for $35k, sold it a couple years later, no renovation, just paint, for over $100k. Now you can buy it for $85k to $90k, 2-3 years ago it was going for $45-$50k.
The cap rate is important while you’re holding the property, but when it’s time to sell, making or losing $50K in 2 to 5 years time will make all the difference.
You need to buy in the right year, use patience and negotiating skills to buy it right!