All Forum Posts by: Robert G.

Your point remains, but Miami is a poor example for this.....with the Atlantic Ocean to the East and the Everglades to the West, you can really only go North/South.  To the North you'll find Broward and then Fort Lauderdale, and to the South you'll find a a mix of rough neighborhoods and agrigultural areas until you hit Homestead.  Nature and circumstances have created boundaries around good ole MIA. 

Unfortunately, in Miami, acting unethically is the norm, not the exception.  The consequences may make agents reconsider in other markets, but not here.  

If Yoni wants to improve his odds, I still think this is the best way to go.

Bingo. 

Not speaking from experience (I have my license but I am not an active agent), but I think this is your best bet.

@Daniel Jodrey

I think I ran across the duplex you are considering.  A bit south of Palmetto Bay is a nice way of putting that.  It is more "A bit south of Perrine".  Better yet, just call it Goulds.

That is a D neighborhood.  The security railings encasing the air conditioning units should have given it away.  Or the empty lot with the trashed couch across the street.

If you're going to a landlord in that area, I recommend you quadruple your vacany estimates, double your repair estimates, and start setting aside some funds for future evictions.  You can't use working class estimates for properties in impoverished areas.

Edit: Granted that is via Google street view.  Maybe its turned around since then.

A fully renovated duplex for 200k?

Now I'm less worried about the numbers and more worried about the area.  That is well below market for a dublex in a "B" or "C" neighborhood.  Unless you're using "Miami" liberally and mean up North or on the very outskirts....

Daniel,

I haven't delved into it, but your estimates appear low, not conversative.

$200 for electricity on a duplex?  No chance.  Not even if each side is a studio (which I'm assuming isn't the case).

$100 for insurance?  Where can you insure a 200k duplex in Miami for $1200 a year?  It'll be at least 50% more then that.

Repairs seem a bit low as well. Remember, in a duplex, there is 2 tenants and 2 of everything. You need to reserve more then you would in an equivalent SFR.

Estimates for vacany and taxes seem a little low as well.

It is very difficult to make small multi's work in the Miami market.  The purchase prices and expenses are just too high relative to the rental income.

The only properties you can expect to find in Miami for under 150k are either condos (in which case you have to deal with HOAs and associations), townhomes (again, HOAs), or SFR in D or F neighborhoods (warzones).

Honestly, in B and C neighborhoods that most would target for solid rentals with likely appreciation, the land value alone will be close to that budget.

My advice for any 19 year old interested in real estate:

1) Focus on learning.  Doesn't sound interesting if you're ready for action, I know, but the key is to work smart, not hard.  And you can't do that until you know the game inside and out.

2) To that end, I recommend getting a job (even as a grunt) with a local investor.  Preferably someone that is successful and does what you would like to eventually do.  There is no better way to learn then watching someone else do it, and going through the motions from A to Z.

3) Continue to save.  What you have may seem like a lot to you, but it is peanuts when it comes to investment capital.

4) Build up your credit.  There are several ways to do this, so research it a bit, but sooner or later as in investor you will need strong credit to borrow.  Get an early start by establishing pristine credit from a young age.

I'm not too familiar with the LV market, so this isn't a fully informed opinion, but I'll give it a stab anyways, since you asked:

I think both markets are highly competitive (not great for someone starting off). I know the values of properties throughout Miami are inflated (due to foreign investors buying up everything, even at minimal CAP rates). I also know both markets are hot, making selling right much less of a worry then buying right.

If you want to be a landlord and your focus is on rental income, I think LV is the better market, and it probably isn't close.  Miami's rent numbers make very little sense when compared to the purchase price of the properties.

If you're interested in chasing appreciation, then Miami is probably the better play, just not necessarily at this moment.  It's been hot for several years now, and values have been pushed up quite a bit.  Need a bit of a return to the norm before I'd plunge in with appreciation in mind.

If you're looking at flipping, both markets offer great prospects.  All comes down to sourcing good deals and putting together a solid team.

I'd sell.  If you can get 275k out of it, which it sounds like you can (be it from your relative or on the open market), you are essentially tying up that capital for a $1300 a month rental income.  No thank you.

You wouldn't buy a 275k property that you could rent out at $1300, so why would you keep one when you have the opportunity to cash out?

You will have made about 6 years of cash flow from the rental and about 100k in appreciation in that time.  Sounds like a win to me.  Cash out and move on to the next one.