Miami/Broward County Florida New Investor

[Nicole Johnson]

Hi, 

My name is Nicole. I am a new investor in Miami. I am trying to start with move-in ready homes to hold as a short term rentals and homes that need renovation to either hold or flip. THIS IS MY FIRST DEAL! Yay! I'm excited! I have about $200k cash saved to use on a couple of projects. I don't really have much proof of income so I will be using a DSCR loans for the move-in ready project and I am looking for hard money lenders who can assist me with the purchase/rehab of the other project.

I am considering 4,500 square foot home for my first flip. Purchase price is 600k. ARV is 900k+ but I'm not sure the renovation cost. What would be the worst case scenario for budget on a home this size with an outdoor pool? Is $150k-$200k too low? Let's assume it needs EVERYTHING! Is this too large of a project for my first flip? I am thinking worst case scenario I buy for list $600k I put $150k in $50k fees. I'm in for $800k on a hard money loan. After a 6-8 month reno, I refinance into a dscr loan and use it as a short term rental. Or ideally, I sell for 1m+ :) This is a bank owned property by the way in a hot market. (Just toying around with the idea, of course I would do an inspection/appraisal/contractor walkthru ect. prior to closing)

By the way, I have no idea what I am doing lol. All I know is how to run the comps to make sure I'm not making a terrible decision. I am lucky to have friends to run things by them to double check. I would love any assistance or advice, especially from experienced investors in the South Florida area. I would also love some assistance from a realtor with expertise in investment properties. I am open to Miami-Dade and Broward County. I am looking to build a network of contractors, vendors, agents ect. I would like to do my first 2 deals within the next 14-30 days. With this super market South Florida market, I am leaning towards foreclosures and off market deals. 

Thanks in advance for any advice. Best of luck to everyone!

[Adam Schooley]

@Nicole Johnson I'm a real estate agent and investor in Broward. My last flip was in Weston. Personally I would advise you to look at a lower price point for your flips with alot less square footage.  The costs can add up very quickly especially with the cost of materials and labor right now. Generally a hard money lender is going to want you to have at least 20-25% downpayment, so $120k for your $600k purchase price. Most hard money lenders charge you 2 pts for the amount borrowed so another $9,600 plus your closing costs. That doesn't leave you very much money to rehab the property, plus your holding cost for 6-8 months. You're also forgetting how competitive this market is right now. Even bank owned properties are being bidded up to retail prices and still need full rehabs. I would definately do your research and try to analyze as many deals as possible. Watch the properties that are auctioned off and follow them to see what they eventually sell for. You can go to BCPA.net for Broward properties. I have some good resources here locally if you need them. Let me know.