Our investment strategy is value-driven in both the short and long-term. We firmly believe that a strong equity position is key to securing investment positions, no matter what type of property or hold period. The only way to secure a significant equity position is to target properties in distress, disrepair or those failing to meet their highest-and-best-use.
On short-term (fix & flip) investments this proposition may be more obvious. But on buy & hold properties it seems many investors forget the foundational strength of a strong equity position.
For example, it may upon initial analysis seem attractive to buy a $100,000 single-family “turn-key” rental property available in a company’s inventory. The company claims that this finished product generates a 10% gross return located in a geographic area with expectations of an average rate of appreciation. But this analysis can often be short sighted.
Typically that $100k “turn-key” property will leave the investor little or no equity position. And more importantly, those $100k properties are in areas that will experience “average” appreciation . . . AT BEST!
Now in South Florida a similar single-family rental property may cost $200k. Yes, South Florida real estate is a little pricier and the market is VERY competitive. But here’s the big difference when you dig into the numbers.
1) With Restore 818’s Turn-Key Rental Property Program we deliver homes where the investor typically will begin on day one of being lease-ready with a 10% to 20% equity position. You may not turn around and immediately sell a rental property, but what’s a better position to be in: sell the $100k turn-key product you purchased “off the shelf” completed for maybe $105k if you’re lucky, or sell your $200k Restore 818 turn-Key Rental Property for $230k? And that difference only gets magnified over your hold time.
2) Gross returns on the South Florida properties Restore 818 delivers are comparable to other areas of the country with lower priced investments. However the rapidly growing population (remember Florida just surpassed NY as the third most populous State) is putting more and more pressure on the demand side of the property rental equation. This will likely equate to stronger increases in rents and further reductions in vacancies than other competing rental markets.
3) All of our target acquisition areas are screened for the potential of accelerated appreciation.We carefully research and target properties in the path of city/county improvement projects and expanding areas of gentrification. That means the potential for appreciation rates for our target areas are two or three times the appreciation of other adjacent South Florida neighborhoods. When you keep in mind the growing strength of Florida’s economy and demand pressure on both homes and rentals, that can equate to exponential rates of appreciation when compared to other areas of the country.
This unique value-based investment opportunity in South Florida lies not only in single-family and multi-family properties. South Florida has an abundance of mid-century commercial and multifamily buildings with significant architectural character un-paralleled in in new construction. Fortunately for us as investors many of these properties have been neglected over the years and are in desperate need of repair, renovation and modernization.
As we have seen with buyers of for our single-family homes the shifting demographics of South Florida, Eastern Fort Lauderdale in particular, has a strong leaning to a “preserve and restore” mindset. Therefore we see targeting this redevelopment niche as a unique competitive advantage in the single-family, commercial and multifamily market.
Learn more about your options investing in Real Estate in South Florida with Restore 818 Inc. — call us at 786-217-6733 or email invest@Restore818.com.