All Forum Posts by: Francesco Ponticelli

Quote from @James McGovern:

I can't think of anything more braindead than purchasing a condo in South Florida right now.

 :D depends on the goal, not all investors have the same one!

Quote from @Joe Morello:

Francesco, thanks for the detailed insight! Perfect info for this thread. I am with you on everything you said, however I am curious about what you mentioned you have been seeing with insurance. Although -8% is nothing compared to how much the premiums have been jacked up over the last 4 years, it's certainly something! Who have you seen coming into the market, increasing competition? I have yet to see that myself. 

Hi Joe! Yes, increasing competition! Frankly, I would have been happy with no increases :D so a -8% was gold! In the last two years we had approx +35% YoY each year. Let's hope it keeps stable/descresing! 

Yes you can try, most of the developers are always in search for new deals, unless have already a pipeline or are at full capacity. Keep in mind that they usually have already their network and agents on the field, so be ready that they will ask what you have available. If you get something good in the area, I have a developer looking there starting from Sept/Oct. 

It's a good area to look at and your criteria are right, I would go for that if the numbers are good: a lot is happening in Little Havana because of the Miami21 zoning ordinance, allowing developers to build more units than the ones now. Make sure to look carefully at the comps sold in the last 300 days to understand the ceiling of what you could get in the best scenario. 

Hi Jason,

Congrats on the choice! 

My advice is to double check if to invest in Fort Meyers: talk with someone who knows the local market inside-out and is not pushed by selling you something because the market there has been very tricky. I am not an expert of the area (I focus on Miami and Broward County), but I have been monitoring since 2021 because some friends bought there multiple properties and lands.

Two years ago, because of post pandemic, many developers (including Lennar & the other usual building in FL) started building a lot, prices went up up up and since last year, market stalled and now they are coming down again. Lennar, for example, has introduced  incentives to the table, because Fort Myers and North Fort Myers area (the one developing now) are not a key migration market. The inventory is sitting there from what I see from market data.

Hi Nicholas, congrats on your first deal!

I have been managing manually as my property manager was doing it for me until last year, but now I manage the properties and I started using Stessa. My property managed used that and, by pure coincidence, I have heard about it in the BP episodes and I use it since it's included in the BP Pro membership. 

So far so good and I like how it manages it. 

One important advise - assuming you put the property under an LLC - is to have the bank account for that LLC where money comes in and money comes out, to make everything simple. On the depreciation, my accountant always added it (if you don't do, the IRS will take into the account when you will sell the property, unless you leave to heirs...but it's another story!)

Good luck! Feel free to ping me if you have some questions

Hi Igor! 

Welcome to Miami and welcome to the USA! 

In which are of Miami are you living?

Same background (European immigrant, working in Tech but on the side real estate investor abroad and then started building my portfolio here). 

Happy to network and chat in front of a coffee! 

Hi Joe,

I own condos in Miami and I have clients, each one with different financial situations, owning condos too. I have been investing in Miami Dade County area, so i can't talk for the rest of FL that is a different beast, county by county, so I give you my point of view of Miami.

The key point is which type condo are we talking about: newer >2010 condo, old condos, in key growth areas or not.

Data, as always, speaks: condo sales ares slowing down, overall Miami is close to be a Buyer market overall (it is already a Buyer's market in many zip codes...), while appreciation is on average +5.5YoY. Some areas have higher appreciation, some areas lower. 

Condos are also unique because each condo is different from another, so the strategy is really building by building, and there are buildings which match each of the options you listed above.

June 2024 showed clearly the increase (and rush to sell) of inventory, that for 90% is driven by older buildings (40 years+).  Days on Market is increasing steadily, driven by those older condos. 

Newer ones (2008+) are suffering from seasonality now but will pick it up in Q3-Q4: if you look at historical data, Miami Dade county has always had seasonality low volumes during summer time, due to hurricane season, holidays and less tourists visiting. Those are the ones who most likely will be less hit by Special Assessment and, with the current "fear" in the market, are a good option to buy at a discounted price. Again, being very focused on key buildings close to new constructions being delivered in 2-4 years, in key growth areas, you can get good deals and cash in apprecitation in the mid-long run.

In older buildings, if you are not financially solid, it's recommended to sell before HOA and Special Assessment will put you out of business.

Key drivers of the HOA fee increases have been insurance and special assessments. Newer building has seen huge increases in insurance in the past years because of the collapse of the Champlain Towers and hurricanes, but that is over and there is more competition now in the market: I have already seen the cost of insurance going down -8% in the negotiation for 2025 in one building where I sit in the HOA.

In my condos, I hold: they are pretty new, with healhy equity already, and solid, with no Special Assessment at the horizon. And they are located beside multi-million development which will bring up the value in 4-5 years, if the market remains the same.

I have clients who are selling because they have some equity but are cash flow neutral/negative and fear some assessment. I have sold one in 40 days and others are on the market. 

I have 3 clients willing to buy: they are highly focused on specific buildings (and line) they want, and are watching the market to attack potential distressed owners and grab the best deal.

Hope it gives the perspective, even if it's only focused on Miami, that is one of the hottest market nation-wide and some dynamics that are very local (i.e. latin-american buyers buying cash to take $ out of their country)

Hi Jesse, congrats on your choice, you won't regret! 

I have been investor for the last 9 years in Miami and working full time as realtor now and I would not recommend getting into wholesale fresh: get first some experience, get to know the market extremely well, and then you will know when to start wholesaling too!

Depending on the budget, I would recommend looking into single family or duplex, keep some $ to do some house hacking and rent out the other units/rooms. Houses are still selling as hot cakes with 30 days on market if priced properly and inventory that has been the same for the last 8 months (new in, old out), so be ready to be very clear on where to focus your search. 

STR I would highly recommend not to focus on as first investment: also there, my partner is a superhost and we have been managing Airbnb for years and the last year has been pretty funky: people tend to book last minute and you risk to be cash flow negative starting brand new. There are many factors to consider, I drop some here:

1) being new, need to build your reputation and have no repeating customers

2) Miami has had an overflow of STRs buildings and "illegal" inventory: investors who bought new condos allowing STR with loans to pay, tend to lower the price to get bookings. And in condos, you can't differentiate so much with the other units in terms of amenities you offer.

3) Regulations: first zoning need to allow STR, then the second step (if condo), is the HOA. The HOA of some buildings who did not have the "lodge or hotels" stopped allowing Airbnb.

Commercial: it's a different beast, if you refer to warehouse, office or retail (and not multifamily). I do commercial and there are good options but the price ranges are much higher than Single Family and the risk (i.e. in retail, ~80% of the business fail in the 1st year) could be higher. 

Hope this gives you a whole picture to your questions. Happy to answer more questions if you have doubts.