The Miami Market is Overrated?

Miami, Florida
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The Miami Market is Overrated?

Alberto Freites
Member since 2023 · 6 posts · 4 votes

Hi everyone,

Good afternoon! I wanted to post a question to this forum. 

I'm from Venezuela, living in Miami with my family. For many years, I've been studying and following this community to dive into the world of real estate as an investor. My goal is to purchase my first duplex or triplex in this area in 2024. (Using house hacking strategy)

I would love to receive feedback regarding this region from more experienced investors. Do you guys believe that South Florida is overvalued? Mi

Thank you,

3Reply
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John K.
Lender · West Palm Beach, FL · Member since 2017 · 306 posts · 122 votes
2y

Hi Alberto, 

Personally, I don't believe Miami or South Florida is overvalued in the sense that a decline in home prices is coming. However, it is a highly desirable area which results in very low cap rates. Thus it is very difficult to cash flow with a rental property, however you can still make a great return with appreciation. 

House hacking is an excellent strategy, and just got a lot easier as conventional loans now allow 2-4 units with only a 5% down payment. The rent from the other units is used to help you qualify for the loan as well. I'd be happy to go over any loan questions you might have, so feel free to reach out anytime! 

John
 

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  • John K.
    Lender · West Palm Beach, FL · Member since 2017 · 306 posts · 122 votes
    2y

    Hi Alberto, 

    Personally, I don't believe Miami or South Florida is overvalued in the sense that a decline in home prices is coming. However, it is a highly desirable area which results in very low cap rates. Thus it is very difficult to cash flow with a rental property, however you can still make a great return with appreciation. 

    House hacking is an excellent strategy, and just got a lot easier as conventional loans now allow 2-4 units with only a 5% down payment. The rent from the other units is used to help you qualify for the loan as well. I'd be happy to go over any loan questions you might have, so feel free to reach out anytime! 

    John
     

    4Reply
  • Obed Calixte
    Real Estate Agent · St Petersburg, FL · Member since 2019 · 320 posts · 182 votes
    2y

    What are your goals for the property? 

    There are deals in every market whether they are overvalued, oversaturated etc. It may take a little bit of time, hussle and creativity to find the one for you, but it is out there.

    2Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    2y
    Quote from @Alberto Freites:

    Hi everyone,

    Good afternoon! I wanted to post a question to this forum. 

    I'm from Venezuela, living in Miami with my family. For many years, I've been studying and following this community to dive into the world of real estate as an investor. My goal is to purchase my first duplex or triplex in this area in 2024. (Using house hacking strategy)

    I would love to receive feedback regarding this region from more experienced investors. Do you guys believe that South Florida is overvalued? Mi

    Thank you,


    You need to understand Miami is one of the most sought after city by investor, OO and financier of the world hence the price is skyrocketing.
    If I were you I would not buy one duplex but three LOL

    1Reply
  • Malgorzata SadowskaPro Member
    Real Estate Agent · Miami, FL · Member since 2017 · 506 posts · 205 votes
    2y

    with the current market micro & macro trends, our market is poised to continue to go up for the foreseeable future.

    4Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    2y

    if you guys see any price dipping in Miami, just buy 2 to 3 duplex for househacking and hold it for ten years....this market is even stronger than bay area post covid.

    1Reply
  • Raymond J. RodriguesBusiness Member
    Lender · Miami, FL · Member since 2017 · 1k+ posts · 797 votes
    2y

    Hi @Alberto Freites, @Malgorzata Sadowska has helped quite a few BiggerPockets members house-hack here in the Miami Florida area and will be a valuable asset to your team! Definitely reach out to her. 

    [email protected]619-456-8311
    Helm Mortgage Corp.5125 Reviews
    WebsiteView Page
    1Reply
  • Alberto Freites
    OP
    Member since 2023 · 6 posts · 4 votes
    2y
    Quote from @John K.:

    Hi Alberto, 

    Personally, I don't believe Miami or South Florida is overvalued in the sense that a decline in home prices is coming. However, it is a highly desirable area, which results in very low cap rates. Thus it is very difficult to cash flow with a rental property, however you can still make a great return with appreciation. 

    House hacking is an excellent strategy, and just got a lot easier as conventional loans now allow 2-4 units with only a 5% down payment. The rent from the other units is used to help you qualify for the loan as well. I'd be happy to go over any loan questions you might have, so feel free to reach out anytime! 

    John
     


    Yes, that is precisely why I think it is overrated with respect to cashflow, it is very difficult to find a property that will leave you above water after doing the numbers. Or maybe I think I need a better realtor or look for an off-market property. 

    1Reply
  • Alberto Freites
    OP
    Member since 2023 · 6 posts · 4 votes
    2y
    Quote from @Obed Calixte:

    What are your goals for the property? 

    There are deals in every market whether they are overvalued, oversaturated etc. It may take a little bit of time, hussle and creativity to find the one for you, but it is out there.

    One of the main characteristics is that I need a property already rehab; for now, I cannot focus on the rehab process due to my current job, duplex, or triplex where I can live.

    0Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    2y
    Quote from @Alberto Freites:
    Quote from @John K.:

    Hi Alberto, 

    Personally, I don't believe Miami or South Florida is overvalued in the sense that a decline in home prices is coming. However, it is a highly desirable area, which results in very low cap rates. Thus it is very difficult to cash flow with a rental property, however you can still make a great return with appreciation. 

    House hacking is an excellent strategy, and just got a lot easier as conventional loans now allow 2-4 units with only a 5% down payment. The rent from the other units is used to help you qualify for the loan as well. I'd be happy to go over any loan questions you might have, so feel free to reach out anytime! 

    John
     


    Yes, that is precisely why I think it is overrated with respect to cashflow, it is very difficult to find a property that will leave you above water after doing the numbers. Or maybe I think I need a better realtor or look for an off-market property. 


     in highest market you are looking for appreciation. There's asymetrical relationship between cash flow and appreciation.

    If you are smart, just buy duplex and househacking it or buy SF and househack. When you live in the best market like this, dont chase cashflow but chase appreciation.

    0Reply
  • Alberto Freites
    OP
    Member since 2023 · 6 posts · 4 votes
    2y
    Quote from @Malgorzata Sadowska:

    with the current market micro & macro trends, our market is poised to continue to go up for the foreseeable future.

    But do you think there are opportunities today to generate cash flow, or at least the property pays for itself? If you have any, can we work together on that?
    0Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    2y
    Quote from @Alberto Freites:
    Quote from @Malgorzata Sadowska:

    with the current market micro & macro trends, our market is poised to continue to go up for the foreseeable future.

    But do you think there are opportunities today to generate cash flow, or at least the property pays for itself? If you have any, can we work together on that?

    look man, my area is higher than miami but I can convert a house to DSCR 2.x after I build 2 bathrooms. To generate return you have to make changes to the investment itself, that's where you generate value. In your case you can always buy broken duplex/SF and create value from there.

    1Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    2y

    @Alberto Freites

    cash flow is more difficult in every market right now.

    0Reply
  • Hans Waisfeld
    Real Estate Agent · Miami, South Florida · Member since 2023 · 62 posts · 30 votes
    2y
    Hey Alberto, thats a great question. I was raised in Miami, been here since 1999 and selling real and investing here estate since 2016. If you have been studying the market for many years you are just like how I was before i bought my first property waiting around to see and studying the market while prices continue to go up.

    Look If you are thinking of house hacking, then who cares if the market is overrated or not, as of right now if you have been renting all of these years you have been loosing $25-40k each year by renting and not gaining from the Miami appreciation of the market. And as long as the numbers make sense then go for it. I currently own 2 multifamily properties in Miami and I am working on my third one as we speak. I got my first one with a 5% down while the tenants were covering almost all of my mortgage. I now do airbnb in that property and generates me about $3k a month net cash flow.

    I will be glad to help you find the right multifamily, run numbers, comps, analyze rents, and together we can see what is the best option for you if that's something you would like let me know.


    3Reply
  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    2y

    HOI & HOAs have been killer here, but if you're going to hedge your bets than house hacking is as sound as it gets. South Florida will face a hit, I believe, in the housing market but not necessarily Miami. Miami, as a market, is the pretty primo.

    Lived here for quite some time & sold a couple months back.

    2Reply
  • Luis Maqueira
    Rental Property Investor · Miami · Member since 2022 · 247 posts · 75 votes
    2y

    Alberto

    Welcome to bigger pocket.  House hacking should be part of the school system. 

    Is the path to wealth. House hack, Duplex, Fourplex,  8 plex  Apartment building. 

    Look for Real Estate Investors Local Club,  find the team you need to keep growing. Aim for the sky... you will reach the ceiling.... 

    Learn from the ones buying Multifamily and you will do house hacking with no problems.

    Luis Maqueira MMP

    3Reply
  • Ghenia Flewellyn
    Investor · Fort Lauderdale, FL · Member since 2015 · 83 posts · 51 votes
    2y

    @Alberto Freites

    I live in so FL. Opportunities still exist here. Look to buy off market. I can connect you to a few off market contacts when you're ready if you'd like.

    1Reply
  • Ghenia Flewellyn
    Investor · Fort Lauderdale, FL · Member since 2015 · 83 posts · 51 votes
    2y

    @John Karg

    Hi John! Can I get your contact info? I'm a SoFl investor. Thank you!

    1Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Alberto Freites:

    Hi everyone,

    Good afternoon! I wanted to post a question to this forum. 

    I'm from Venezuela, living in Miami with my family. For many years, I've been studying and following this community to dive into the world of real estate as an investor. My goal is to purchase my first duplex or triplex in this area in 2024. (Using house hacking strategy)

    I would love to receive feedback regarding this region from more experienced investors. Do you guys believe that South Florida is overvalued? Mi

    Thank you,


     YES, most of Fl is overpriced big time, 900- 1100 a sq ft is insane. There is a crash coming. Cash will be king in about 12- 16 months. 1st the condo market, its already happening. As they all need to pass the structural inspections by the end of 2024. Many cannot afford the assessments. My building is averaging about 20k per unit. I know some that are 50- 150k per unit. those folks will dump. This will spill over to the housing market Price reductions are happening everywhere. Title cos are slowing down and even going out of biz. My neighbor around the corner just paid 4.5 MILL for a 3500 sq ft house, that s grossly overpriced, 1100 a sq ft, obscene. Miami/ Coral Gables, even worse. 1500 1700 brick houses without a garage on main roads (Byrd ave for example) 1.5 MILL is just nuts. The kids have to park on the lawn, so it looks like the ghetto and you can't even get out of your driveway, to much traffic. Try finding a great deal where you net even just 10% not going to be easy. 

    Be very careful, 

    All the best 

    2Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Ghenia Flewellyn:

    @Alberto Freites

    I live in so FL. Opportunities still exist here. Look to buy off market. I can connect you to a few off market contacts when you're ready if you'd like.


     Really deals in FT Lauderdale. What do you consider a deal ? Post the numbers and the street. 

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @V.G Jason:

    HOI & HOAs have been killer here, but if you're going to hedge your bets than house hacking is as sound as it gets. South Florida will face a hit, I believe, in the housing market but not necessarily Miami. Miami, as a market, is the pretty primo.

    Lived here for quite some time & sold a couple months back.


     One of my best friends owns one the largest brokerages in Miami, she says do not touch it, its going to crash.  The deals there I have seen maybe net 2% terrible 

    1Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Obed Calixte:

    What are your goals for the property? 

    There are deals in every market whether they are overvalued, oversaturated etc. It may take a little bit of time, hussle and creativity to find the one for you, but it is out there.


     Where, I lived in Dunedin for two years, the pricing is ridiculous, 500k for 1200 sq ft nothing of homes? 

    1Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    2y
    Quote from @Bob S.:
    Quote from @Obed Calixte:

    What are your goals for the property? 

    There are deals in every market whether they are overvalued, oversaturated etc. It may take a little bit of time, hussle and creativity to find the one for you, but it is out there.


     Where, I lived in Dunedin for two years, the pricing is ridiculous, 500k for 1200 sq ft nothing of homes? 


     $400 PPSF ? lol ...that's middle class house.

    but yea nothing make sense if we see current valuation using past mirror, but if we're alien came from future then we may say "oh this makes sense".

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Carlos Ptriawan:
    Quote from @Bob S.:
    Quote from @Obed Calixte:

    What are your goals for the property? 

    There are deals in every market whether they are overvalued, oversaturated etc. It may take a little bit of time, hussle and creativity to find the one for you, but it is out there.


     Where, I lived in Dunedin for two years, the pricing is ridiculous, 500k for 1200 sq ft nothing of homes? 


     $400 PPSF ? lol ...that's middle class house.

    but yea nothing make sense if we see current valuation using past mirror, but if we're alien came from future then we may say "oh this makes sense".

    The point is these are nothing of homes selling for 500k, most do not even have a garage. Alien lol. I will not touch anything in FL, for now. This is one of my old homes, nothing of a house, the garage was converted to a MB, it sold in like 3 days cash, INSANE price.  

    We put in two new baths, kitchen, and a nice landscaping package. Not sure why there are no photos, If I recall we did not even have to list it, the neighbor bought it Now its even more overpriced, 

    1818 Douglas Ave, Dunedin, FL 34698 | Zillow

    Continue crushing it bro 

    0Reply
  • Ghenia Flewellyn
    Investor · Fort Lauderdale, FL · Member since 2015 · 83 posts · 51 votes
    2y

    @Bob Stevens

    Had an off market triplex for 560k minimal work needed hit my inbox last week. Dania. Ran the numbers and thought it was a good deal if I were ready to buy. Best of luck on your journey! It's a wonderful ride!

    0Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    2y
    Quote from @Bob S.:
    Quote from @Carlos Ptriawan:
    Quote from @Bob S.:
    Quote from @Obed Calixte:

    What are your goals for the property? 

    There are deals in every market whether they are overvalued, oversaturated etc. It may take a little bit of time, hussle and creativity to find the one for you, but it is out there.


     Where, I lived in Dunedin for two years, the pricing is ridiculous, 500k for 1200 sq ft nothing of homes? 


     $400 PPSF ? lol ...that's middle class house.

    but yea nothing make sense if we see current valuation using past mirror, but if we're alien came from future then we may say "oh this makes sense".

    The point is these are nothing of homes selling for 500k, most do not even have a garage. Alien lol. I will not touch anything in FL, for now. This is one of my old homes, nothing of a house, the garage was converted to a MB, it sold in like 3 days cash, INSANE price.  

    We put in two new baths, kitchen, and a nice landscaping package. Not sure why there are no photos, If I recall we did not even have to list it, the neighbor bought it Now its even more overpriced, 

    1818 Douglas Ave, Dunedin, FL 34698 | Zillow

    Continue crushing it bro 


     All New Yorkers that moved to Miami really makes the Miami a 100% appreciation in 24 months LOL crazy. 

    0Reply
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