MARKET SPOTLIGHT: Is Florida at risk for another real estate crisis?
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is to add about 10 more properties a year, on average. “We spend a lot of time and energy going into the weeds to find the off-market deals. That’s the best way to capture some equity,” he explained. “We’re still able to find deals in Jacksonville proper.” Dorsey finds that the biggest challenge he faces with rehabbing houses is that contractors are busy. “Work is plentiful, but contractors are more of a lim- ited supply. As it relates to rehabs we’ve seen a 20-30 percent increase in labor and materials from four years ago. It’s definitely been unique in that respect,” he said. Dorsey estimates that his average time to rehab a prop- erty is 30-45 days. If priced right the time on market to sell the rehab is less than 45 days making for a total 90- 160 days to go all the way through the fix-and-flip cycle. While it is hard to find deals that make sense in the cur- rent economic climate, he is finding it very easy to sell his properties. With properties not appreciating the way they were over the past 3-4 years, Dorsey believes the market in Jacksonville has stabilized and he sees very little risk. “My philosophy is that risk is all relative to what you’re comparing it against. We’re dealing with real estate, so we’re dealing with something people still need. There is population growth, so as long as we are prudent and aren’t overleveraging and overpaying, and conscious of what’s happening in the market, it’s as reasonable a risk as anything else in any other line of business,” he noted.
If there is a housing crisis in Florida, it appears to be in the area of affordable housing. Demand is there, but wages are not keeping up with increases in rents. In the Miami area in particular, Winston said the sin- gle family market is struggling and there has not been any real growth in the condo market as well since a lot of the market rate builders went out of business after the recession and never returned. In the end, Winston said finding money to build isn’t the problem. It’s finding the right project to build in a desirable area with pent up demand and not enough supply that proves challenging. “The hottest market is still Miami-Dade County. Or- lando is starting to grow because they’re putting money into mass transit, but it’s still tied to the entertainment industry which is low paying. And Jacksonville always flies under the radar,” Winston said. Joel Cone is a freelance business writer based in Southern California. His articles have appeared in California Real Estate magazine, Real Estate Southern California, OC Metro, GlobeSt.com, Foreclosure News Report, the Los Angeles Daily Journal and the Smarter Investor blog for U.S. News & World Report, as well as many other print and online publications. Contact him at snocone1030@gmail.com.
It starts with our trained acquisitions team locating distressed properties in specific areas of the city that qualified tenants are asking to live in. We then perform a full renovation by adding several “maintenance preventers” like hard-surface flooring, new roofs, new HVAC, updated plumbing, etc. This helps keep maintenance request to a minimum and our inves- tors coming back when they decide to expand their portfolio. After 6,000 renovations, we pride ourselves on providing the highest quality, turnkey rental properties in Memphis.
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32 think realty housing news report
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