Why the Miami Real Estate Market Appeals to House-Flippers
House flipping is a lucrative investment but it’s important to remember the cardinal rule: location, location, location. Knowledgeable investors often spend countless hours researching the markets in order to find the right one that will meet their needs. If you’re considering investing in a home in the Miami Real Estate Market, you’re on the right track.
According to Fortune Builders:
The allure of Miami’s real estate sector is indisputable. The metro area of Miami had the most homes flipped of any market nationwide, with 10,658 homes flipped in 2015 — representing 8.6 percent of all Miami-area sales. Things are only going to get better.
Over the past year, house flipping in Miami has been on the rise, as activity has increased from 4.7 percent of all sales to 6.4 percent. Miami ranks third in terms of flipping volume, according to RealtyTrac.
In addition, the market median price for Miami has significantly dropped, falling to $283,000 in 2015 compared to its peak of $373,000 in 2007, making the Magic City a very, very opportunistic area for house flippers.
There are many reasons why house-flipping in the Miami real estate market is lucrative. For example, the gross profit for a flipped home (defined as a property sold twice within 12 months) in the first quarter of 2016 in the Miami-Dade county, along with Palm Beach County and Broward County, was $65,000 which is up from $54,500 a few years ago according to a report from RealtyTrac.
Zillow reports that the median price in Miami peaked in 2007 at roughly $370,000. In November of 2016 the median price was $280,000 —and that’s coming of a year where median prices rose about 3.9 percent. This indicates that investors can find good value-add opportunities.
According to Patch of Land, the Miami real estate market “is one of the great areas of our country, and flippers agree. In fact, the Miami metro area had the most homes flipped of any market nationwide —with 10,658 homes flipped in 2015. That represented roughly 8.6 percent of all property sales. This trend is poised to continue as more and more distressed properties exit the foreclosure process.”
Developers, house-flippers and long term investors are the kind of investors who need hard money loans. There are plenty of reasons why investors should get involved in investing in real estate in Miami and hard money loans help them to get started. Hard Money Lenders’ best source for years was Trust deed investors from all over the world. The reality is that most investors don’t have that many options out there as far as getting high ROI(Return On Investment).
Trust deed investing can yield annual returns in the high single-digits paid in monthly installments. Anyone can get involved in trust deed investments but investors should seek expert advice in trust deed investments. There is a lot of information that you’ll need to get started such as real estate valuation, project management, law, and financing. Potential investors should focus on investments that with a high property value relative to the amount of the loan.
Investors who pursue trust deed investments are attracted to the diversify they bring to their investment portfolio, generate regular income, minimize risk, and typically produce higher return rates than traditional investments in stocks and bonds. Also, trust deed investments offer more consistent returns compared to fixed-rate bond investments, which are subject to fluctuations due to changes in interest rates and the economy.