Investing in South Florida

27 Replies

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!

Originally posted by @Kevin Koffman :

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!

 Great points Kevin, understanding the phase of the market cycle and having a deep understanding of your market is incredibly important. Real Estate is an amazing vehicle to generate income and has created more millionaires than any other field. Not every real estate deal is a good one, doing your research on the area you are investing in, understanding the economics of the area and knowing the stage of the cycle are all crucial to finding the right deal. 

Originally posted by @David Mejia :

Hello guys. My name is David and very excited to be part of bigger pockets. I am looking for my first rental property but with high prices down here ( Broward ) properties don't seem to cash flow ( at least the ones I have chedcked so far).  Any suggestions on what part of Broward or even palm beach or Miami date will be a good location for rental property.  thank you for your response and for helping a new real estate investor.

Hi David, welcome to BP it really is a great place to network and learn about real estate. Attending local REIA groups and investor meetups are all very helpful. There are a lot of meet ups in the Broward area that could provide great value.