Expand Multi Family Property

[Andrew Biagi]

BP Team, 

 My parents own a couple of multi-family properties south of Miami, closer to Homestead. The area around the properties have really grown over the last 20 years, and has been cleaned up quite a bit. Driving through the area now compared to back in the 90's is night and day. Nicer apartment complexes have popped up everywhere, replacing what previously were projects. Planted medians, swale, the whole 9. 

  Is it feasible to think the duplexes could be converted in to 4 or more units. Perhaps a 3 floor walk up? Just seeking advice on the best way to approach such an idea. Should we approach a local builder/developer first? An architect? An engineer? What's the best way ahead? 

Property is currently the following per MDC,
PA Primary Zone 3161 UC CENTER - RESIDENTIAL MODIFIED (RM) 4 MAX HT
Primary Land Use 0802 MULTIFAMILY 2-9 UNITS : 2 LIVING UNITS

Thanks in advance,

Respectfully,
Andrew

[Jason Wray]

Andrew,

Miami is a very expensive place to build/renovate in some cases it's worth looking at the total funds expected to be used and regroup. Have you thought about buying more 2-4 units just North of Miami like Cape Coral, Venice, Pinellas, Lee, or Citrus Counties? I ask because I am up here in Pinellas by the Gulf Beaches and our 2-4 Units run between $300K to $650K.

Miami 2-4 Units run between $850K to $1.8Million and the Taxes and Insurance premiums are higher. Plus the cost to renovate or build is almost 2-3 times more than other counties due to "Miami Money" costs. We have also been hit by huge insurance premium hikes due to the recent hurricanes and major losses.

Those premium hikes have caused a lot of investors to sell and when there is scared or stressed sellers it can cause a value drop to the market. I mention this because last thing you want to do as an investor is put money into a property and the values drop. Maybe buying more properties at a better price point is worth consideration.

Unless your properties are free and clear or mortgaged so low that the rents will recoup your building costs in 12-24 months by adding more sqft...