Tag Archives: investment

Florida will need 669,000 more apartments by 2030, according to a new study. 

Read the full article:
https://goo.gl/1scHrj

Demographic Shift, Investor Demand Reshaping Broward’s Apartment Market which shows similarities to Pinellas & Sarasota counties.


Pic credit – Jason Ludwig

PUBLISHED: JUL 17, 2017

Broward County multifamily housing and retail is undergoing a remarkable transformation as millennials and empty nesters are embracing urban living and young professionals seek similar experiences in suburban settings.

Having been built out for some time, much of the development in Broward has shifted from gated communities in western suburbs to multifamily housing in the urban core. About 4,000 condominium and apartment units in 20 blocks of Fort Lauderdale are set to come online in the next few years. 

Most of the new properties will resemble The Manor at Flagler Village, a mixed-use complex with residential units between 700 and 1,350 square feet. Rents range from $1,826 to$2,921 per month, about 30 percent higher than other nearby Class A buildings. The retail component, which is managed by Franklin Street, occupies the first floor and includes popular restaurants such as The Brass Tap, a craft brewery and Mellow Mushroom. Other service-based retailers range from a dentist office and fitness center to nail and hair salons. Nearby is a Fresh Market grocery store, a museum and parks. These amenities appeal to millennials. 

Young adults are looking for the best apartment spaces available regardless of unit size. Millennials care more about the fact that there’s a restaurant that they like in the lobby and Wi-Fi access throughout the entire building.

Their interests are altering the retail environment. Traditional retail is being replaced with service-oriented businesses where people can eat, have a drink, get their nails done or meet with a financial advisor.

Baby boomers want similar amenities. Many retirees are selling their four-bedroom houses in the suburbs and moving into an apartment where they don’t have to worry about things like lawn care. They can travel for pleasure or to visit grandchildren and want the freedom that comes from not owning a home. 

Thanks 

As part of the population move to the downtown core, more people are doing something unusual in South Florida: they are giving up their cars. With easy access to ride-sharing programs, consumers are taking the money budgeted for a vehicle and putting it toward rent instead. 

Broward municipalities such as Coral Springs and Plantation are following suit. An urban core is emerging in Coral Springs centered around a new downtown city hall that is under construction and over 300 apartments have been built. One is Bainbridge at Coral Springs, a five-story development with top-of-the-line amenities and rents $300-$700 a month less than in downtown Fort Lauderdale.

Properties like that attract young professionals. Millennials that have small children prefer neighborhoods with A-rated schools. While some couples have started families, they are still active and want to go out and socialize with their friends in places like those in downtown Fort Lauderdale.

They’re attracted to places such as Plantation Walk, which will go up on the site of the former Plantation Fashion Mall. Plans call for 700 rental apartments, 200,000 square feet of retail and a Class-A office tower. It appeals to young people who don’t want to travel 25-plus minutes to downtown Fort Lauderdale for work or fun. They would prefer a short walk or ride to their office and to have restaurants, bars and shopping close to home.

Multifamily investors have noticed the trend and started to grow their portfolios. Demand has so outstripped supply that an investor that would normally purchase a Class A or Class B property in an established area is going out of their comfort zone and buying a Class C property in an emerging neighborhood.

In Broward County, much of the buyer interest is coming from out-of-area investors working with local conduits. When Franklin Street recently marketed 167 units in downtown Plantation, we garnered about 17 written offers in two weeks, half of them from investors in New York, Philadelphia, New Jersey and Canada.

Outsiders are active in Florida for two reasons: The first is cap rate compression. Investors are seeing deals at 1 to 2 percent, and at zero percent in some cases in New York. Florida cap rates are also being squeezed, but they are still at 5-6 percent.
Second, Florida offers significant tax benefits. Out-of-state investors can re-capitalize their portfolios, sell their properties at a premium, come down here, and trump everybody at the local market level.

Today’s investors are not looking for immediate cash. Many are buying properties in neighborhoods that they think are up and coming. These buyers expect that their apartments or mixed-use buildings will be smack in the middle of a redevelopment play five to 10 years down the line. Given current trends, they are likely to be right.

 

Credit:

HERNANDO PEREZ AND DAN DRATCH

Source:

Southeast Real Estate Business

URL:

http://rebusinessonline.com/

Why even look at a Cap Rate?

 

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“What is the cap rate?” 

This is a question I receive a lot of the time and its a loaded question with a complex answer.

There are lots of variables that go into formulating a cap rate.  It isn’t as easy as what is the income minus the expenses contrasted against the asking price or value.

When looking at cap rates, other items go into the valuation such as;

Location

Condition

Age of property

Updates/Deferred Maintenance

Subjective Numbers included or excluded (i.e. – self managed)

Potential traps or pitfalls (i.e. – a forthcoming RE Tax increase based on a $$$ sales price)

 

Let’s dig down a little and throw out some examples of how these items can affect cap rates.

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Location – This is reasonably obvious in that, if the property is on a beach or some highly desired location, then the demand will compress the cap rate.  On the flip side, if the property is in a blighted area or less desirable location, then investors may be looking for a more enticing cap rate.

 

Condition – This also seems like a simple variable but often times, pictures can be misleading or concerns can be concealed and this will certainly affect cap rates.  If an investor is purchasing a 10,000 SF office building that is fully occupied but during due diligence it is found to be structurally unsound and the building requires substantial rehab work to solidify the structure, this will negatively affect the cap rate.

 

Age of Property – Accordingly, if the property is newer, then the potential for deferred maintenance, repairs, system failures, etc is lessened and vice versa on buildings with decades under their belt, the possibility for repairs, replacements, rehabbing, etc go up while the cap rate will fluctuate similarly.

 

Updates/Deferred Maintenance – This wont have such a profound impact on the cap rate in most cases, but if the amount of items needing updates adds up, then it may become problematic.  (I.e. – painting, parking lots, roofing, HVAC, Water heaters, etc)

 

 

 

Businessman Touching a Chart Indicating Growth

Businessman Touching a Graph Indicating Growth

Subjective Numbers included or excluded (i.e. – self managed) – This is my favorite category by far.  I’ve seen so many marketing packages from other companies and sellers that exclude items such as management, repairs, vacancy, insurance, etc.  Most of the time, its selective memory or a slanted perspective, such as ‘The owner self-manages’ so there is no management included in expenses.  You will also find the ‘market average’ for repairs which tends to run much lower then reality, but is usually accepted as reasonable.

Finally, the vacancy is a interesting metric as I’ve encountered numbers ranging from zero to five percent.  (Use this math as an example – 10 unit building X 12 rentable months = 120 months of rent — Approx each month of vacancy = .09% so if you were full 119 out of 120 months then you had 99.1% occupancy.  Most likely the property had turnover and no matter how nice the property is or how earnest the tenants are, people move, they get new jobs, help family, explore, etc.  Let’s say you had 4 move outs over the course of a year and 2 units only lost 1 month of rent, 1 unit lost 2 months of rent and the last unit required some substantial upgrades/remodeling and was offline for 2 months as well.  That’s only 6 months out of 120.  Not a big deal?  It’s 5% vacancy.

 

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Potential traps or pitfalls(Pie in the Sky Theory)  This is where a great agent comes into play or a seasoned investor can capitalize on an acquisition.

RE Taxes reset based on point of sale pricing.

Insurance costs tend to rise when a new policy is required

Reserve funds that were in place before sale, disappear and money must be allotted/escrowed for those items

It costs money to improve units/property to utilize the upside potential that folks are selling.  Keep that in mind when looking at marketing.

Improve Your Commercial Property Cash Flow

 

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The Value of Cost Segregation and Reducing Your Taxes

The Situation

In any economic time, it is important to manage your cash flow wisely.  For property owners, it can mean the difference between protecting your investment and foreclosure.  One way to improve cash flow and reduce taxes on commercial property is through Cost Segregation.  Cost Segregation allows the owner to accelerate depreciation of certain components of the building from the standard thirty-nine or twenty-seven and a half year schedule to fifteen, seven or five years.  Increasing the rate of depreciation will offset earnings, which in turn reduces federal taxes and provides improved cash flow.

Who Should Consider Cost Segregation?

Cost Segregation can be beneficial in a number of commercial property scenarios including new construction, the purchase of an existing building, with renovation or tenant improvements, or on a property where a Cost Segregation Study has not previously been conducted.  The best candidate for the process is a building or improvements of a value greater than $500,000, and in some cases, lesser expenditures for build-outs can be beneficial.  In addition to the financial opportunity, one real advantage of a Cost Segregation Study is that it can be done on real estate put into service in prior years without needing to amend prior tax returns.  With the new investment income tax, Cost Segregation has become an even more valuable tax savings tool.

How Can We Help?

A Strong Construction Services Team can take you through the Cost Segregation process.  Our staff works directly with a qualified construction cost expert to conduct an analysis of your building, determine allowable depreciation benefits and ensure that all deductions are fully documented and verifiable.  The time needed to conduct a Cost Segregation study varies based on the specific attributes of the property and the owner’s tax situation.

Article via Shirley Fieber, CPA at Kerkering Barberio

Ms Fieber concentrates her practice in the areas of Construction Services which she leads for the firm, Individual and Business Tax Consulting and Real Estate Support Services. She has experience in Partnership and Limited Liability Company taxation. She also provides Cost Segregation Study services to businesses and investors.

What to Look for in a Multifamily Investment Property

Presented by Sean Dreznin

Ext Neighborhood1

MULTIFAMILY INVESTING TIPS

via 100units.com

How to Find a Profitable Apartment Building Investment

Investing in multifamily properties is extremely rewarding and profitable for many reasons. Not only is the rental market currently very strong, but the potential to earn money is much greater in multifamily properties than single family properties. However like all real estate investments, the success of your multifamily investment property will depend heavily on a number of factors.

Before you start your search, here is what you need to look for in a multifamily investment property:

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Location – Where your apartment building is located will greatly affect the performance of your investment. Find information on local employment rates, per capita incomes, crimes rates, and types of crime. Knowing your potential renter demographics will allow you to determine whether the property will be a good investment.

Cash Flow – Like any smart investor, you want the largest possible profit margin for your rental properties. Don’t rely on the advertised or published capitalization rate and instead, conduct your own property analysis to make an educated decision.

Capital Improvements – One of the things you should also look for is capital improvement opportunities. Look for easy, low-cost replacements or improvements that will quickly boost the value of your property and earn you a better ROI.

Price – Of course, even if you find a property that has great location and cash flow, the success of your investment will depend on your initial purchase price. Make sure you do your research or consult a multifamily expert to avoid overpaying on your multifamily investment property.

 

As an experienced multifamily sales agent, apartment owner and former property manager, I know that buying apartment buildings can be a challenging process. Our team of multifamily property investment advisors are experienced in providing investors like you with the confidence and peace of mind that only comes from working with highly-driven and passionate multifamily property investment advisors. If you are interested in acquiring an apartment building on the West Coast of Florida from Naples North to Tampa or Central Florida from Lakewood Ranch to Orlando, contact us today and allow us to tell you exactly how we can help you secure a profitable property at the right price.

 

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The remodeled El Patio Apartments near the bayfront in Bradenton. A classic building with character!

5-Unit Multifamily opportunity in Sarasota, FL

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CLICK HERE FOR Detailed Offering Memorandum

Price: $624,000
Number of Units: 5
Building Size: 4,025 SF
Property Type: Multi-Family
Lot Size: 25,543 SF
Year Built: 1983

 

  • Reasonable increases to market rent increases yield over 7%
  • Newly renovated units provide turn-key investment opportunity
  • SFR tenant pays all utilities; 4-plex tenants pay electric and cable
  • Property includes a 4-plex and a single family home
  • Close proximity to A-Rated Schools including Riverview High School and Phillippi Shores Elementary
  • Located near Publix, shopping, restaurants and most importantly, Siesta Key Beach!

Description

This is an opportunity to acquire five renovated apartments/rental units in the central submarket of Ridgewood Heights in Sarasota, FL. The property is an infill four-plex plus one adjacent single family home in a predominantly residential neighborhood.

The property’s proximity to top-rated schools, secondary schools, retail and employment bases make these units attractive rentals to a wide variety of potential future tenants. The current owner has handled most deferred maintenance including new roofs, painting, fencing and a new a/c for the SFR all within the past two years.

With rents near market, renovations performed and expenses stabilized, this is truly a turnkey opportunity and perfect for out-of-market investors and 1031 exchanges.

Location

Located just North of the intersection of Proctor and Swift, this property sits on the West side of Swift Road. The property’s tenants enjoy close proximity to numerous retail centers and A-rated schools. Its location affords ease of commute for employment via US 41 and I-75. The quiet, centrally-located neighborhood is ideal for both families and young professionals alike.

Contact

Sean Dreznin at sean@ian-black.com

or

George Kruse at george@ian-black.com

Really, really, really ridiculously good investment for sale in Sarasota, FL – Across from Southgate mall on the gateway to Siesta Key!

Under-Contract-Sign

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3 tenant retail center

Lease terms in place expire in 2019, 2022 & 2025

5% annual increases

All electrical updated

Plumbing & Drain lines were recently re-done

HVAC ages – One new in 2014 — Two new in 2015

Property NETS approx $55,000

Contact our office for a CA and detailed data

ian-black-logotype1

(941) 906-8688

srqcre@gmail.com

Really, really, really ridiculously good investment for sale in Sarasota, FL – Across from Southgate mall on the gateway to Siesta Key!

Image result for zoolander

 

 

Cash buyers still dominate housing market

By  via Herald Tribune. com

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Cash on the table remains the preferred method of payment for homebuyers in Southwest Florida.

Buyers paid cash for 54 percent of all residential real estate purchased in Sarasota and Manatee counties in May, real estate Researcher RealtyTrac said Wednesday.

The two-county region ranked second among major U.S. metropolitan areas for the highest share of cash buyers of single-family homes and condominiums.

Cash buyers have dominated the Sarasota-Manatee real estate market for several years, even leading the nation for the top share in April.

But no-loan buying has actually slowed down, as 58.1 percent of home sales were closed with cash in May 2014.

Nationwide, all-cash buying dropped to 24.6 percent in May, its lowest level since November 2009, RealtyTrac reported.

Locally, Realtors say smaller investors have become key players in home sales while large institutional investors — who commanded the market during its early rebound — have stepped back.

Retiring baby boomers who have sold homes up North also are paying cash for homes here.

“As housing transitions from an investor-driven, cash-is-king market to one more dependent on traditional buyers, sales volume has been increasing over the last few months and is on track in 2015 to hit the highest level we’ve seen since 2006,” said RealtyTrac vice president Daren Blomquist.

Institutional investors — those that buy at least 10 properties a year — accounted for just 1.7 percent of home and condo sales in Sarasota-Manatee in May, down from 4.8 percent one year earlier.

For complete article and others, CLICK  HERE <——-

List of current Condo Developments in Sarasota, FL getting started in 2014-2015

List of current Condo Developments in Sarasota, FL getting started in 2014-2015

Rendering of Aqua 280 from www.aqua280.com, via Sean Dreznin's Blog

Rendering of Aqua 280 from http://www.aqua280.com, via Sean Dreznin’s Blog

The Queue in Downtown Sarasota
Click here for access to The Q home page

The Jewel
Bayfront Sarasota Luxury Condominiums
Click here for more information

The SanSara
Downtown Sarasota with limited views of Bayfront
Click here to view the designer’s website

One88 on Golden Gate Point
Coastal Condominium Residences
Click here to pre-register on developers site

Aqua280
Located on Golden Gate Point, this luxurious complex looks out at the Bay and Ringling bridge
Click Here to view page

Rendering of the Vue at Gulfstream and US 41 in Sarasota, FL from the website of the Kolter Group, via Sean Dreznin's Blog

Rendering of the Vue at Gulfstream and US 41 in Sarasota, FL from the website of the Kolter Group, via Sean Dreznin’s Blog

The Vue
On Sarasota Bayfront
Currently in a pickle about additional traffic impact with the Ritz and others.
Click here to visit the website

Other developments forthcoming…

Florida Gulf Coast Premier Property Management

List of current Condo Developments in Sarasota, FL getting started in 2014-2015

Rendering of Aqua 280 from www.aqua280.com, via Sean Dreznin's Blog Rendering of Aqua 280 from http://www.aqua280.com, via Sean Dreznin’s Blog

The Queue in Downtown Sarasota
Click here for access to The Q home page

The Jewel
Bayfront Sarasota Luxury Condominiums
Click here for more information

One88 on Golden Gate Point
Coastal Condominium Residences
Click here to pre-register on developers site

Aqua280
Located on Golden Gate Point, this luxurious complex looks out at the Bay and Ringling bridge
Click Here to view page

Rendering of the Vue at Gulfstream and US 41 in Sarasota, FL from the website of the Kolter Group, via Sean Dreznin's Blog Rendering of the Vue at Gulfstream and US 41 in Sarasota, FL from the website of the Kolter Group, via Sean Dreznin’s Blog

The Vue
On Sarasota Bayfront
Currently in a pickle about additional traffic impact with the Ritz and others.
Click here to visit the website

Other developments forthcoming…

View original post

Sarasota is No. 1 midsized-market destination for movers

Sarasota is No. 1 midsized-market destination for movers

By Harold Bubil, Herald-Tribune

 Sarasota is #1

Sarasota is #1

Sarasota ranks No. 10 in the nation among U.S. moving destinations, according to a just-released report by Penske Truck Rental.

The other nine metropolitan areas are major cities, such as Atlanta, Chicago, Dallas, Seattle, Orlando and Charlotte, N.C.

North Port-Bradenton-Sarasota is the 73rd largest metropolitan statistical area in the U.S. with more than 709,000 inhabitants in 2011, according to the Census Bureau. Orlando is No. 26 with nearly 2.2 million; Charlotte, N.C., is No. 33 at 1.7 million.

Penske, a global transportation services provider, said the list is compiled through online consumer truck rental reservations and through Penske Truck Rental call centers. Only one-way moves in 2012 were considered.

2012 Top 10 Moving Destinations:

Previous year’s ranking is noted in parentheses

1. Atlanta (unchanged)

2. Dallas/Fort Worth (4)

3. Phoenix (2)

4. Orlando (3)

5. Chicago (unchanged)

6. Houston (unchanged)

7. Denver (unchanged)

8. Seattle (unchanged)

9. Charlotte, N.C. (10)

10. Sarasota (9)

CLICK HERE <——======== for full article