All Forum Posts by: Christian Busch

@Account Closed I've looked at a lot of the pre-construction buildings and their projections. Most of them are very optimistic about occupancy % and daily rates when they do their projections. I've done the math on a few dozen of the buildings and individual units for buyers and have rarely found something that will truly make you more than a 4% cap rate. The high HOA fees plus taxes plus wear and tear and the intense Airbnb competition (tons of units) in Miami make it difficult. If you want to buy a pre-construction unit I'd rather try to find a project that just launched by a reputable developer (Mast, Related, etc) and buy really early to capture the appreciation that usually happens during pre-construction. There are also a few buildings that were recently delivered where a lot of resales are happening and some of those will be quite attractive to buy in this year. Feel free to message me if you want to chat further.

Sounds like an ingoing 5% cap rate if you assume zero vacancy. And at a $100k profit margin to refi it sounds tight to me. I personally wouldn't buy anything at a 5 cap unless you see really significant upside in the rents? 

Hi Michael, thanks for kicking-off this discussion! 

Miami and Broward have some of the stricter building codes and the 40-year and 50-year certifications are definitely a good way to make sure the buildings stay in shape. I advise most of my clients to stay away from buying anything that's pre-1998 construction. The building code got much tighter afterwards. 

The older buildings may be in good shape but unless you have full details on the reserves, the board, the upcoming repair work and most importantly the insurance cost and insurability I would stay away from them, especially as investment properties. On top of that, the government lenders like Fannie and Freddie may not lend against these buildings. They have a blacklist which they're going to make public later this year but in the meantime a good mortgage broker can advise you on the specific buildings. 

Bottom-line - I'd stick to newer buildings. 

Hi Ron, I chatted with a buddy who's been in the Miami market about this topic a few months ago. Short summary: there are no bargains to be found here. In 2008-2010 there were hundreds of properties being auctioned weekly. Now it's maybe a few dozen, most of which never make it to the auction because they get pulled/ settled. 

The real deals can be found by tracking areas or buildings, know what they're worth and then bid aggressively when something comes on the market. Feel free to message me if you want to chat further. Christian

Hi Twee, 

I'm local to Miami and have a good understanding of the Miami Beach Airbnb regulations. There are only a few areas in Miami Beach that allow STR. A lot of them are on the Bay Side around West Avenue. There's a map where you can look up the zoning. If the local zoning permits it, you need to check your condo/ HOA association next: most of them don't allow short-term rentals but some do. I have a list of the ones that do in Miami Beach.

A lot of people do Airbnb illegally in Miami and in Miami Beach. Miami Beach has been very aggressive in enforcing this, Miami itself has been more lenient so far. For an investment property I would strongly advise you to follow the code and the HOA rules. There are quite a few buildings that allow it but you have to look at it on a building level. There are also often incremental fees that will lower your returns on these types of investments: property management and building fees most notably. Feel free to message me if you want to chat further.

Definitely positive experience so far. I think they're currently closed to new investors due to Trinity merger.

I'm an investor in the broadmark funds and would love to connect with fellow investors regarding the recent takeover announcement: https://www.businesswire.com/news/home/20190812005165/en/Trinity-Merger-Corp.-Broadmark-Announce-Merger-Agreement

thanks!