Where are the safest low income places in Miami to invest in?

Question

Hi,

This is my first post on BP.  Thanks to everyone posting awesome articles and questions.  Up until now I have been reading hundreds of articles over the past several months almost religiously on a daily basis and podcasts daily each way on my 45 minute commute to work (I am running out of BP podcasts and alternate with audible audiobooks).  Also have been starting to analyze one or two deals a day from wholesalers mostly for practice.

I am amazed at the quality and quantity of content.  I am however stuck on a geographical element of my property search process.  Now am ready to start making offers with the BP buy and hold calculator with a minimum $100/mo /door analysis and very conservative figures for expenses and most likely slightly overestimating them.

Where are the safest low income areas to invest in multifamily in Miami and Fort Lauderdale?  I am planning to make my first RE investment in multifamily up to a small apartment.  Being that I already have a full time job, I would have to hire some kind of property management help.

From common sense it's a lot more economical in the long run and less of a hassle to manage/aggravation to invest in a safer area.  I am fine with low income areas as long as it doesn't feel like I need to be packing heat just to visit the neighborhood.  If I am going to expect my PM and/or send my own maintenance guys out there, the neighborhood needs to be comfortable to be around in.  Low income areas look very different in Miami than they do in the Midwest.

Images Below: I know it's not a fair comparison, but most of the multifamily I have seen in Miami looks like the quality of the first picture where other markets look like the Nashville MF property here.  Am I missing something?  Where can I find neighborhoods in South Florida that reassemble the second photo?

Thanks!

First one is Miami

Second is in Nashville

Gabriel Rebustillo · Answer

@Jordan Finkelman & @Mantas Kudrinas ,

A powerful tool to identify properties are the Miami-Dade and Broward County Zoning Websites.  For instance you can locate all 4 unit multi-family properties in Miami-Dade under zoning code RU-3.  You will be able to locate where in the county these units exist on or off market.  Knowledge is power!

Miami-Dade

http://gisweb.miamidade.gov/zoning/  https://library.municode.com/HTML/10620/level2/PTI...

Robert G. · Answer

If you're set on small MF, I'd highly suggest starting in Fort Lauderdale and working your way north at that point.

Miami is high purchase price, high insurance cost, high tax cost, and relatively low rental income in return.  No exaggeration, I've seen duplexes that bring in $2200 a month selling for over $400,000.  In some areas, you can even get 2 SFR for cheaper then a duplex.

And, aside from all the numbers that don't work, Miami just doesnt have much small MFR inventory.  You'll find pockets here and there, but nowhere near the representation you'll find in other markets.  I think you'll do better a bit further north.

Chris Kennedy · Answer

I have to agree with what @Robert G.  said - Broward has much more opportunity for small Multifamily than Miami right now. It is definitely tough to find the deals, but they are out there and you can get actual 8-9% caps with decent cash flow.

@Mantas Kudrinas  , there are some Broward areas that I think are good areas to invest right now from the point of view of prices still being reasonable and improving neighborhoods:

Dania beach area - still has some rough spots, but we have found properties for $55-$65k per door here this year near to US 1. Developers are starting to pay more attention to this area since it's one of the least developed spots between Miami and Fort Lauderdale.

Croissant Park and Tarpon River area just southwest of downtown Fort Lauderdale. There are still deals to be had, and proximity to downtown is allowing rents to be increased if you can purchase and renovate an outdated property in otherwise good condition. You could also group Sailboat Bend into this area, but it's getting really tough to find good prices there.

Regarding Miami I agree that SFR is the better way to go there. There are spots in North Miami and North Miami Beach that still have SFRs under $130k with excellent neighborhood rent rates and not too rough. Plus if you're willing to get your hands dirty then you can pick up something with liens and/or city code violations for a bargain, and add significant value by clearing them up and doing some basic rehab. Refi in 6-12 months and you might even own one for close to no money in the deal :D

Jordan Finkelman · Answer

I don't know why the pictures I posted earlier did not work, but I will try again below.

Left: Nashville, TN

Right: Miami, FL

See a difference?  The properties just look nicer overall in other markets.  Maybe it doesn't matter that much but just something i noticed as a common difference in characteristics.  All other things equal, I prefer to own the one on the left.

Account Closed · Answer

http://www.miamiherald.com/news/local/community/miami-dade/article12605384.html

Filak Thomas · Answer

@Robert G. Amen

Jordan Finkelman · Answer

Thanks Gabriel!

Robert G. · Answer

Mantas - No zip codes for you, sorry.  I've researched MF down here but have yet to jump in (for the reasons stated, it just doesn't make sense to me).

Jordan - You have to factor in all the factors.  The types of construction are different for one thing.  We get hurricanes regularly, so our building codes are more demanding.  You wont find any wood houses with vinyl siding down here at all.  Also, this city is older.  Depending on the area, you'll find lots of stuff built from 1920 to 1955.  The newer construction is even more expensive (and has even thinner margins for investors).

In your example above, that isn't even a low income neighborhood from what I can see.  Thats looks like a standard C or so in Miami.  You'll know the rough stuff when you see it.

Jordan Finkelman · Answer

Thank you for the input.  Definitely a good idea to check with some property managers.  Anybody have a good local company to recommend?  I checked out the BP directory and there are PMs for almost every state - except Florida.

I appreciate the geographic advice.  That's a really practical strategy - to focus on SFR's in Miami and focus even more on broward and north of there (inclusive of MF).

Where are the safest low income places in Miami to invest in?

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