Miami

[Alain Amaran]

Hello, I'm a Real Estate Appraiser from Miami, Fl. I've always been into real estate since and have had much interest in real estate investing since i can remember. I'm currently 21 years old and i have been an appraiser for a year and a few months. Anyway, i only have about $5,000 saved at the moment, but i have a family member with a significant amount of cash interested in investing in real estate as well. For the last few weeks I've been listening to the bigger pockets podcast and found a lot of helpful information. My family member called me today asking what my plans are, and i had told him my original idea was to save enough money to buy some sort of property myself, Single family or preferably duplex or multi-family and also that i was thinking about a condo before since my funds were short but after running the numbers and researching it, found the HOA makes a property hard to cash-flow. My family member told me he was interested in Real Estate Investing as well. So i now have funds to start doing something ASAP. My question is now, how can i find out what's the best to invest in? He says he is open to anything, and also doesn't have the amount of education required to make a sense able decision on what exactly to do. That's why he was calling me. Personally, my goals are to buy and hold. I rather have that check coming in every month. But again, my knowledge is limited to about 25 podcasts from bigger pockets regarding rental properties and a few on flipping properties. How can i find out more options, and understand what would be the best type of investing for me at the moment?

[David O.]

@Alain Amaran

To answer your question I am referring to one of my previous posts that I hope shed some light on which asset type you should start investing in Miami:

There is lots of condo development going on in Miami Beach, Brickell, Downtown. I do not think the condo market is a good investment right now in Miami. Very high prices, saturated market with lots of inventory, and very little cash flow after HOA fees. In Miami and South Florida in general, I would invest in small multifamilies (duplex, triplex, fourplex's etc, depending on your budget) with a value add potential (i.e., below market rents, filling up vacancies, renovations, etc).

Look for emerging markers and gentrifying neighborhoods in Miami, in strong urban core areas with very low vacancy rates. Multifamilies in Miami Beach are very expensive and usually purchased by foreign investors for wealth preservation and diversification purposes, and sell for very low cap rates.

However, throughout many different areas of Miami, there are a lot of older, tired landlords and property managers that are either too lazy, too comfortable, or not aware of the high rents the Miami markets are commanding.

Miami is a very trick city and you must be very familiar with the major markets and sub-markets to succeed. You must know the acquisition prices intimately, the market rental rates, and be a very strong operator when managing the properties. Prices can increase (or drop) dramatically within a few blocks, and you do not want to be caught overpaying.

Moreover, management is the second most important aspect. I personally manage all my properties because I have had not any access with a strong property management company. At the end of the day, you are the one that will care the most about your investment and your money.

Whether you buy and hold or flip, I believe multi-families is the best and safest way to go, for new and experienced investors alike. See an example of a Miami deal I did in my post here on BP:

https://www.biggerpockets.com/forums/223/topics/37...

Also, for your renovation projects, use a general contractor that is highly recommended and trustworthy.  I am the principal of a construction firm that work with both investors and retail homeowners on their renovation projects in Miami. I started the construction end of the firm after being tired of working with smooth talking contractors that never delivered on time, over budget, and over-priced. I hired several expert tradesman as employees and now I can do my renovation work in-house while providing the same level of investor friendly service and professionalism to investors in South Florida.