All Forum Posts by: Frank Mongiello

Great points! Escalation clauses work wonders and definitely popular in this market. A lot of people aren't as comfortable waiving inspections. Standard down here is 5-7 days on competitive properties which is already pretty short. 

When looking at towns in West Palm, North Palm, Palm Beach Gardens, Jupiter and Tequesta, it seems that any house in decent condition is getting 4-5 offers. In addition, at least 1 is cash at or above list price. I am going to talk about some strategies I use and would like to hear from others on what they are doing. 

1. Large Binder Deposits: This is one my broker highly encourages and I have seen it go a long way. Standard binder deposit on a conventional deal is 2%, I like to go much higher to 5 or if the buyer can 10%. When the listing agent is looking through similar offers and sees one with a 50k binder, your offer will immediately stand out. Your deposit is going towards your down payment so as long as you use your due diligence period properly there isn't a huge downside. 

2. Cash over appraisal of appraisal wavers: I've heard other states don't allow appraisal waivers, but in South Florida they can make a deal. If your lender has all the documents they need from the buyer and there are enough comps in the area, they can type the information into their system and see if it qualifies for a waiver. I've tried to figure out how I can better predict when it is a possibility, but every lender I ask doesn't have an answer and relies on their systems algorithm. Often the reason the sellers prefers cash is because of fast closing but more importantly not having to worry about low appraisals. By removing that risk your offer doesn't differ much from an all cash deal. If the property doesn't have the ability for an appraisal waiver and the numbers make sense, bidding cash over the appraised value is your next best option. 

3. Tight loan approval periods: Many lenders set a standard for 21-25 days to get your final loan approval approved by the underwriter. That means that after 20 days if the underwriter finds something unexpected and denies your application, you would be free to walk out of the contract with all your deposits refunded. The seller has to then put the house back on the market after 20 days of being under contract, and either start from square one or call back buyers who had 20 days to find something else. You can see why listing agents would flag longer approval periods and why those offers wouldn't be as strong. 

4. Having your lender call the listing agent with a du approval: If your agent is the only person calling the listing agent in a multiple offer scenario, you might be in trouble. The listing agent and seller are going to want to know who is approving the loan and find out how much work they have actually done gathering your documents. Many people can go online, type in a couple numbers and get "pre approved or pre qualified" in 30 minutes. 

5. Making the decision more emotional: Unless the seller is an absentee owner looking only at the bottom line, chances are they had a lot of memories in the house. Them selling isn't as easy as collecting a check and deep down they want to have the piece of mind that whoever buys isn't going to treat the house poorly or anger the neighbors. An emailed letter explaining who you are and why you are buying makes you a real person, not just numbers on a contract.

If you got this far thanks for reading and let me know if you have anything to add!

Hi Nancy, 

There are quite a few communities in Palm Beach Gardens, Juno Beach, Jupiter and Tequesta that have reasonable options. For example for townhomes not far from the beach you can typically pay between 400-450k for a 2 bedroom that will make 2200-2500 on an annual basis, or 3900-4200 in season. Rental restrictions often limit you to renting it twice a year with the minimum stay being somewhere between a month to 5 months. HOA payments in this scenario would put you between 350-500 based on different communities. Condo options are more vast, and the numbers differ greatly.

MLS access is restricted for agents based upon what Boards they pay for. For example I have MLS access from Miami up to Port St. Lucie but I work with agents throughout the state for listings in Indian River, the West Coast and North Florida. I would find out what areas you are targeting and put together a rockstar team together including lenders, property managers and contractors.

Hey Hamid, 

Being an agent in South Florida I think it really depends on the use of the property currently, what level of work you want to do to the property, and whether you care more about a %return or total return. 

From my experience being an agent in Jupiter Florida, I have seen less inventory in A neighborhoods making finding more delimitated properties harder to identify. Looking in B+C neighborhoods you'll have more inventory and less competition. 

If you change the use of a property by converting bedrooms or reconfiguring properties you can also make solid returns where other investors turn their back. In West Palm for example you'll notice many houses not far from downtown were built in 1929 and 1952-1954. The demands of the buyer back then are much different than today. Properties in A class neighborhoods typically were built in the late 80s, early 90's and early 2000's which is more desirable for the modern buyer. 

What I would do if I was in your position. 

1. Take that area down to a 1-5 mile radius. 

2. Find a Real Estate Investor Friendly Agent 

3. With a simple MLS search you can identify what similar properties are getting in rent. More importantly you can find out how long they are sitting on the market and what the ask to contract price is.

If they are getting rented fast at a number that makes sense for you, you should be in good shape. 

Hi Mandar I am an investor friendly agent in South Florida(I cover Martin County and Palm Beach County). Would be happy to hop on a call and talk you through whether Florida would be a good market for you and answer any questions you might have. In South Florida we tend to have higher appreciation than the national average and have had a high influx of out of state business coming to Miami, Fort Lauderdale, West Palm and Palm Beach Gardens. As I don't cover the Miami and Fort Lauderdale markets I have agents I work with down there. I also think the Vero and Tampa markets are good up and coming markets as well and have agents I work with there as well based on what you are looking for. 

Haven't heard of this one, I am fairly active on networking groups in the area. Would love to chat about this one and other meetups I attend(without pitches!) 

Not sure if anyone on this thread would still be interested, but I would love to join one. 

I am a real estate agent in Jupiter and would love to learn more about areas where I can invest as well as finding good areas for some of my clients to invest in as well. Would love to connect and come to any meetups in the area!