Wich area is best to flip houses in the Miami area ?

Question

Does someone can tell me what are the best neighborhood/areas to flip houses in Miami and South Florida ?

Jorge Perez · Answer

@Carolina Brembilla land is also inflated and the Miami-Dade building department is a mafia. Yo really do have to a solid network of contractors that are connected in jurisdictions to get projects off the ground, built and permits closed to have a marketable property.

In my opinion, and I love living in Miami, I do not think at the moment it’s a great place to invest. In my specific portfolio I’m selling a commercial property and 1031 Exchanging out of Miami In the next year or so.

I think other parts of Florida like parts of Central Florida like Tampa/Orlando/Gainesville/Jacksonville/Tallahassee look more promising.

Jorge Perez · Answer

@Carolina Brembilla

Florida is a big state and I’m sure flipping opportunities will be available but speaking on Miami specifically SFH inventory is extremely low with realtors having buyers literally waiting for property to be listed so you will be competing with them in your flips. We have had to get creative and patient to find a flip that has a good margin. Even auction website prices are through the roof. We have actually shut down a lot of our activity and waiting for Q4 2020 and 2021 which we are hoping should present opportunities as the real pain of COVID in my opinion hasn’t been felt yet in the RE market.

Hope this helps.

Carolina Brembilla · Answer

@Jorge Perez

Hi Jorge, how are you ?

I was curious to know how does real estate is doing in Miami area lately with all the COVID craziness going on..

We are still thinking about moving to Florida and go ahead with our flipping business.

Thank you for an update !

Carolina

Carolina Brembilla · Answer

@Jorge Perez

Got it !

Interesting scenario.

So flipping is not the best, make sense.

So what about building ?

At the end of the day what’s a good investment strategy out there ? Or real estate there is not at all a good idea ?

Jorge Perez · Answer

@Carolina Brembilla  I personally wouldn’t touch houses on the water. I consider those A grade assets and in my opinion that’s where investors get killed if something goes wrong and too much risk for my tolerance.

Also the vacation rentals are extremely overpriced with, for the most part high condo fees that’ destroys cap rates.

My family and I love B/C grade distressed condos in the suburbs. We have been buying, holding and selling those assets for over ten years. Not glamorous at all but in my opinion are the best and highest returning assets in Miami for the last decade.

We can get in an out of a flip in under 90 days with rehabs if any from 3-14 days with zero headaches and zero risk because they are always great cash flowing apartments to begin with.

Now with Argentina’s currency inflation issue we are seeing the next wave of cash buyers that’s gobbling up our flips. We currently have two properties scheduled to close this month and both sold at market price in under a week. Both cash.

Miami is a unique ecosystem as it’s fed by cash from around the world and cash that for the most part needs to be extracted and laundered in American assets so what’s happening here doesn’t make sense on 99% of the deals as foreign investors have no problem overpaying.

In conclusion, I think flips can be done but Miami is absolutely not the best market for it.

Carolina Brembilla · Answer

@Jorge Perez

Thank you Jorge !

Wow ! Tough market though.

We are flipping in the Phoenix area and here good houses fly and market is up in the sky..

I knew that South Florida market was tougher and more intricate but I was hoping that wasn’t that bad.

What about big projects ? I saw areas next to the water where big houses went under contract fast.

What’s the average time on the market over there ?

Also, let me ask you this: being in this field what would you recommend ? keep flipping houses, invest in vacation rentals ? Or what else ?

Thank you very much for your advices.

Carolina

Jorge Perez · Answer

@Carolina Brembilla Profitable Flips are coming few and far between. We have seen investors purchase distressed properties at ridiculous prices and as flippers ourselves(50+) over the last decade our profit margins are slimming and risk is increasing due to higher acquisition prices.

Depending on your budget and risk tolerance you can look into:

Distressed B/C grade condos in Tamiami/Kendall area. With cash you can get good deals and quick transaction times. Not huge numbers but you can do volume. No permits and quick handyman rehabs if you have your team in place.

Westchester/West Miami SFR if acquired at the right price but that market is incredibly saturated and you will need GC’s and permits pulled for the most part.

Good old Hialeah but you really have to do your due diligence here and know your zip codes.

In Miami, patience truly pays. There are still opportunities. We analyze 500-1000 properties a month. Send about 100-200 verbal offers to close on 1 every month or two.

Hope this helps. Good luck investing.

Wich area is best to flip houses in the Miami area ?

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