counties, so long as the numbers pencil out. “We’re looking to go into other parts of Florida as well. We’re looking at metro areas where we feel there’s the most upside,” Garcia said. While business is generally good overall, Garcia ex- pressed some concern about the risk that is still exist- ing particularly in Miami where condominium projects are overbuilt once again. “They’re overbuilding again for sure. There’s going to be a huge supply issue. Whatever there is right now can’t be absorbed by the market. There’s a lot of stuff in downtown Miami that’s just sitting there,” he said. Although times have changed, in certain areas like north Miami and some beach areas Garcia said there
are still cranes dotting the skyline. And even though there are not the foreclosure numbers seen back during the recession, there are plenty of condos for sale that have been on the market for years. “While foreclosures are not as predominant as they were back then, it’s still challenging to get a loan today. Everyone buying from us for the most part is doing traditional Freddie Mac or FHA loans. We’re not seeing crazy loan products yet.” The risk factor in all this depends on the investment strategy, Garcia explained. “It depends on a lot of factors. One of the factors is what you are trying to accomplish. If you want to buy and get massive appreciation from your real estate
With the factors that led to the Great Recession are now in the rear view mirror, Florida’s housing market is holding its own and investors are sticking to their business model. At most investors are expecting to see a market correction, not a recession.
model and specific market area chosen. “The downside, from a rental standpoint, is Miami is the least affordable rental market in the country,” Winston said. “Renters, on average, are paying way more than the 30 percent of their income they should be paying for rent.” Back in 2008 when the market collapsed, the condo- minium market in Miami was overbuilt with most of those units sitting vacant for extended periods of time. As a result, an investor-driven recovery occurred with investor groups and institutional investors buying blocks of fore- closed homes and flooding the local rental market. “We had the biggest overbuilt condo market in the country in 2010 and were out of it by 2014. And people are still coming because we have all the attributes,” explained Winston. “Affordable housing is probably the biggest problem now.” Gabriel Garcia started wholesaling properties in south Florida on his own not long after the crash in 2013. In 2015, he joined with a friend who was also wholesaling on his own, merging their companies to form Florida Cash Home Buyers, LLC. “Most of our business is wholesaling. Probably 90 to 95 percent now. We’ve done some flips as well. About a year and a half ago we started acquiring a rental portfolio. We buy in the tri-county area. We have one in Dade County and the rest in Broward County.” For 2019, Garcia said he is looking to add nine more doors to the company’s rental portfolio with no specific preference for either Dade, Broward or Palm Beach
I consider Florida a very safe place. If we’re there, we don’t think it’s risky. There’s a lot of things going for it. It’s number one in the country for migration of wealth.”
BRUCE NORRIS
It depends on a lot of factors. One of the factors is what you are trying to accomplish. If you want to buy and get massive appreciation from your real estate then it’s a risky time to buy. If you’re buying for that ride, it’s a riskier play. From the standpoint of holding long-term, it’s still a great time to buy.”
RISK IS AREA SPECIFIC Risk is at the heart of any investment – real estate, stock market or otherwise. When it comes to betting on the housing market, however, managing the amount of risk is proportionate to both the investor’s business
GABRIEL GARCIA
28 think realty housing news report
june 2019 29
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