Investing in Miami area - Best strategies today

[Daniel Rabinov]

Hey, 

I had a similar post in the past, but wanted to repost with a bit more focus on the area - So Miami/Broward County would be ideal.

I would like to hear about what would be in your opinion the best way to capitalize on real estate while living in Miami as a new investor while leveraging sweat equity. 

1. Cash at hand: $1M

2. Goals: Cash flow in A/B areas. Meaning I want to maximize the cash flow, but do not want to go to C- neighborhoods. Must have future appreciation while maintaining some cash flow.

3. Do not want to invest OOS (willing to make short trips/flights within Florida) but ideally I would like to be able to drive there.

4. Want to leverage sweat equity for future automation (i.e flip and rent, short term business, etc.)

Considering the current market, I feel like there will be opportunities arising in the next 6 months in the area. Not sure what everyone's market sentiment is here, but there is are pretty straightforward indicators that markets are cooling. 

Please try to direct me to specific areas with specific strategies that you know work. 

I know it's hard to cash flow today, especially in the A neighborhoods, but would like to hear what you think.

Thanks

[John Mason]

Are you looking for cash flow or appreciation mostly say after 4 years

[Daniel Rabinov]

Quote from @John Mason:

Are you looking for cash flow or appreciation mostly say after 4 years

I am looking mostly for cash flow, however, I can build equity through rehab for example.

I'm mostly looking for a replicable strategy.

[John Mason]

This helps?

https://www.biggerpockets.com/forums/55/topics/1101081-looki...

[Daniel Rabinov]

Quote from @John Mason:

This helps?

https://www.biggerpockets.com/forums/55/topics/1101081-looki...

 Not really actually. 

[Branden Rivero]

Quote from @Daniel Rabinov:

Hey, 

I had a similar post in the past, but wanted to repost with a bit more focus on the area - So Miami/Broward County would be ideal.

I would like to hear about what would be in your opinion the best way to capitalize on real estate while living in Miami as a new investor while leveraging sweat equity. 

1. Cash at hand: $1M

2. Goals: Cash flow in A/B areas. Meaning I want to maximize the cash flow, but do not want to go to C- neighborhoods. Must have future appreciation while maintaining some cash flow.

3. Do not want to invest OOS (willing to make short trips/flights within Florida) but ideally I would like to be able to drive there.

4. Want to leverage sweat equity for future automation (i.e flip and rent, short term business, etc.)

Considering the current market, I feel like there will be opportunities arising in the next 6 months in the area. Not sure what everyone's market sentiment is here, but there is are pretty straightforward indicators that markets are cooling. 

Please try to direct me to specific areas with specific strategies that you know work. 

I know it's hard to cash flow today, especially in the A neighborhoods, but would like to hear what you think.

Thanks

I would jump into emerging pockets, buy when it’s considered a c area and sell when it comes up in grade. Pockets I would suggest would be Miami Gardens close to the hard rock stadium, Hollywood, north Miami /north Miami Beach as well. If you are patient you can find something that needs some work 

[Brian Fung]

Aloha Daniel, 

Can you define further the following: 
1. When you say "Cash Flow" how much cash flow are you looking for your $1M to be providing you on a monthly or annual basis after expenses?

2. When you say you must have "future appreciation" how much appreciation are you looking for and over what period of time? 

I think your answers to these questions will help everyone give you more pointed responses. Until you reply, the best things I can come up with are: 

1. In this market, if you need cash flow, have you ever considered lending your money out as a private money lender or hard money lender? 

2. If you want to invest in A/B markets, a common strategy I'm seeing for investors in highly populated metros is to find large lots with a single family home and add 1 or 2 ADUs onto them. In this strategy, it's important to note that appraisers do not consider the ADUs to be actual Dwelling Units so an SFR with an ADU is not the same as a Duplex, even if all of the features (bed/bath, GLA, etc are exactly the same). The SFR + ADU is worth less than a Duplex because the ADU is viewed as an amenity rather than an additional unit so your appraisal will look for other SFRs with ADUs and provide line item adjustments for homes with and without ADUs much like having or not having a pool or a garage. It would be abnormal and outside of normal appraisal standards of practice to use duplex comps.

All of this can be summarized as, "this strategy will improve your cash flow and give "some" appreciation but not the same appreciation as officially converting the home to a duplex". 

3. Convert Apartments into condos: You'll need to work with professional team to help you execute on all of the paperwork for this but you can find a duplex, triplex, quadplex, and convert the units into a small condo and sell each unit off individually. This may not provide you with much of a cash flow improvement but it will help you with appreciation and allow you to sell or refinance those units to reinvest the new equity into other deals. 

I hope this is helpful, if you need clarification feel free to reach out. Either way, good luck and we wish you lots of aloha in your endeavors. 

[Robert Ellis]

Quote from @Daniel Rabinov:

Hey, 

I had a similar post in the past, but wanted to repost with a bit more focus on the area - So Miami/Broward County would be ideal.

I would like to hear about what would be in your opinion the best way to capitalize on real estate while living in Miami as a new investor while leveraging sweat equity. 

1. Cash at hand: $1M

2. Goals: Cash flow in A/B areas. Meaning I want to maximize the cash flow, but do not want to go to C- neighborhoods. Must have future appreciation while maintaining some cash flow.

3. Do not want to invest OOS (willing to make short trips/flights within Florida) but ideally I would like to be able to drive there.

4. Want to leverage sweat equity for future automation (i.e flip and rent, short term business, etc.)

Considering the current market, I feel like there will be opportunities arising in the next 6 months in the area. Not sure what everyone's market sentiment is here, but there is are pretty straightforward indicators that markets are cooling. 

Please try to direct me to specific areas with specific strategies that you know work. 

I know it's hard to cash flow today, especially in the A neighborhoods, but would like to hear what you think.

Thanks

 ground up. you can get a plot of land right now and put 60 units on, I can entitle land with that amount of money and 3x the value through entitlements and sell it shovel ready or bring it as equity so much value. condo entitlement or multifamily is what I'd recommend in miami 

[Yusimay Lorenzo]

Hi Daniel, 

I'm an investor and realtor in the Miami area. In case you would like to connect. All the Best!

[Diego Curbelo]

Hey Daniel,
It's awesome to see your post and focus on our area in Miami/Broward. With $1M in cash and you clear investment goals you're in a strong position. I'd like to echo Brian's idea on considering hard money lending as potential strategy.

Hard money lending can offer similar to even higher returns compared to traditional real estate investments, often ranging from 8-15%, providing the cash you're looking for even in A/B areas. In choppy markets, being a hard money lender allows you to capitalize on opportunities without directly owning and managing properties. Your investments are secured by the properties themselves and you can leverage your , market knowledge to make these assessments and lend to the right deals in case of default. 

If you decide to the rental property route, my company offers comprehensive property management services. We handle the full suite of management responsibilities ensuring your properties are well-managed and profitable. This way, you can focus on finding the next great deal while we take care of the day-to-day. 

All the best on your future endeavors!

[John Oks]

Hey Daniel,

Dade/Broward prices are totally out of whack... if you are looking for cash flow have you considered new construction (build for rent) properties? Maybe in other growing markets in Florida where land is cheaper and prices are more reasonable?

[Mike Klarman]

With one Million, you BRRRR into an STR rental. STR cashflow is beating LTR cashflow pretty handily.

Miami and surrounding areas have a decent STR market. With one million dollars and picking up the houses while distressed and refinancing you can build an extensive STR portfolio. You're lucky to get a 1.5 DSCR with a LTR, I see 2.5 DSCR+ all the time with STR. I just refinanced an investors STR, he had to supply 12 moths trailing history of the STR income. The house was appraised for 400k, he refinanced 70% so he got 280k loan. His monthly payment was around 3,100/month. The house did 7500 per month in STR income. So he's cash flowing 4,400 per month with one investment plus the appreciation of the house. With one Million, I'd get to 10 of those as fast as I could. Has to be 10 great STR opportunities within 2 hours of you.

[Rogelio M.]

Quote from @Robert Ellis:

Quote from @Daniel Rabinov:

Hey, 

I had a similar post in the past, but wanted to repost with a bit more focus on the area - So Miami/Broward County would be ideal.

I would like to hear about what would be in your opinion the best way to capitalize on real estate while living in Miami as a new investor while leveraging sweat equity. 

1. Cash at hand: $1M

2. Goals: Cash flow in A/B areas. Meaning I want to maximize the cash flow, but do not want to go to C- neighborhoods. Must have future appreciation while maintaining some cash flow.

3. Do not want to invest OOS (willing to make short trips/flights within Florida) but ideally I would like to be able to drive there.

4. Want to leverage sweat equity for future automation (i.e flip and rent, short term business, etc.)

Considering the current market, I feel like there will be opportunities arising in the next 6 months in the area. Not sure what everyone's market sentiment is here, but there is are pretty straightforward indicators that markets are cooling. 

Please try to direct me to specific areas with specific strategies that you know work. 

I know it's hard to cash flow today, especially in the A neighborhoods, but would like to hear what you think.

Thanks

 ground up. you can get a plot of land right now and put 60 units on, I can entitle land with that amount of money and 3x the value through entitlements and sell it shovel ready or bring it as equity so much value. condo entitlement or multifamily is what I'd recommend in miami 

Greenfield looks like the way to go on in expensive market .... if one can find the land.  The metro area is squeezed between the Everglades on the West and the coast on the East ...

[Robert Ellis]

Quote from @Daniel Rabinov:

Hey, 

I had a similar post in the past, but wanted to repost with a bit more focus on the area - So Miami/Broward County would be ideal.

I would like to hear about what would be in your opinion the best way to capitalize on real estate while living in Miami as a new investor while leveraging sweat equity. 

1. Cash at hand: $1M

2. Goals: Cash flow in A/B areas. Meaning I want to maximize the cash flow, but do not want to go to C- neighborhoods. Must have future appreciation while maintaining some cash flow.

3. Do not want to invest OOS (willing to make short trips/flights within Florida) but ideally I would like to be able to drive there.

4. Want to leverage sweat equity for future automation (i.e flip and rent, short term business, etc.)

Considering the current market, I feel like there will be opportunities arising in the next 6 months in the area. Not sure what everyone's market sentiment is here, but there is are pretty straightforward indicators that markets are cooling. 

Please try to direct me to specific areas with specific strategies that you know work. 

I know it's hard to cash flow today, especially in the A neighborhoods, but would like to hear what you think.

Thanks

 I think the question is what you can do with your money and what is your risk level. I have sellers of a t6-8 zoned property that would take 1 million right now I'm sure in Wynwood Norte. we can go 12 stories through max incentives and put 60 dwelling units on it. we entitle the land it becomes worth 3 million, then you have construction numbers, sale prices, etc. miami is crazy. the best way to make money from a professional in this industry for 13 years who lives in miami and looks at deals in columbus and miami is development and getting involved in early development opportunities of raw land in urban settings where there is very little risk and pushing high density. I'm a licensed agent in both markets, licensed general contractor in columbus and soon to be miami, I travel to capital markets and the highest interest is in ground up construction and purchasing of entitled sites. 1 million is light for downtown but you can get 8-12 story sites for that that you can put high density on. phenomenal opportunities. best market in the country. you can sweat equity by doing the zoning meetings, helping on design, etc. I'll shoot you a PM you'd be a great person to work with