Florida Real Estate

[EdBowers]

I have been in Orlando for about 3 weeks buying condos - research has been heavy. The buying was a nightmare with value units flying off the MLS within 2-3 days of listing. The market is as hot as the surface of the sun.

I managed to get 3 units finally, one as a back-up, one of the court steps and one curveball I could not possibly see coming.

The market is wiped clean for inventory but it's still selling at 50 % below replacement cost and about 75 % below peak value. Rental returns are 12 %+. It's a no-brainer. Stuff that sold for 205,000 in 2006 is handed out for 46,000.

The supply is down to about 4 months and it's just garbage left.

[bicar]

I bought a place outside of Fort Myers a year and a half or so ago and consider myself lucky. There is a lot of properties that have come on line but they get multiple cash bids the first day. The bids run around $28 per square foot under A/C. There is a lot of flipping going on where appliances are put in and whatever fixing up is needed and then asking $35-$40. Those places cost $100-120 to build plus the cost of land. The problem I saw with the rental market is that there is so much available property, one has to offer a good credit renter a very good deal. That may not be the case in the more heavily populated areas though.

By the way, welcome back Ed. I hope Mr Woohoo stays around too.

[EdBowers]

Same thing happening in Orlando, but only in the slums. I paid 54, 48, 50 dollars per SQFT (heated) in Orlando. Garage and terrace brings it down a bit for 1st and 3rd (about 1500 heated, 2000 with extras), but social area is lifting 2nd up (or down whichever you way you prefer).

[zobolo]

Hey look who just pop his head out from the sand

welcom back Ed

[vornado]

Welcome back Ed.

[expat747]

Ed, where are you getting the leads to the condos? Are you using realtytrac or similar website?

[EdBowers]

For Orlando and other areas you need someone with direct MLS access. Free websites are not fast enough.

Ed, where are you getting the leads to the condos? Are you using realtytrac or similar website?

[bicar]

I think all you have to do is contact a realtor working in the geographical area where you have an interest. The realtor will send you an email with a link to their MLS service. As Ed says, this is the only effective way to get current info. In the Florida real estate market, any listing still active by the time it hits one of the general real estate websites is probably not worth much. There is so much activity in that market that you can check every couple hours and find new listings. You have to be quick to be in that game. An exception could be short sales. Short sales are perhaps the best deal of all but they can take months to clear the lender. If you aren't in a hurry, put in bids on a number of short sales that you like and then sit around and wait to see what happens. I've thought about looking for short sales where I'd buy the property and rent it back to the people living there. Nearly all the Florida short sales are due to people having mortgages substantially greater than the value of the property. Home owners who are listing their property as a short sale are often responsible people who just can't manage to make monthly payments that are so much higher than rent would be. They want to preserve some of their credit rating. You can look at the property and see how it is maintained and many of these properties are in great shape.

[expat747]

Thanks, I always thought that I can find better deals in forclosures rather than short sales.
And when you say realtor, do you mean "buyers agent"?

Anyway, I recently moved to Orlando and looking to buy something soon, if anybody have realtor that deal with forclosures I will appreciate any leads.

[bicar]

Ed would be able to give you some specific information about Orlando. I don't think there are any realtors in Florida that don't deal with foreclosures...that is the bulk of the listings. I don't know that much about realtors. I guess if you approach one and ask him/her to represent you in buying a property, they become a buyer's agent. Actually, that is what I did. I made a slug of bids and eventually got one I liked but when I had it inspected, I found it had Chinese drywall and I bailed on it. It took a while to get another one but I like the one I ended up with better. There are thousands and thousands of properties on the market in Florida. I recent read an article that said that 30% of the houses in Lee County were vacant. Many of these properties are in limbo; they are vacant but the banks haven't processed the paperwork to list them. I'm picturing huge rooms full of paper on properties that no one is paying on but haven't been processed to the point where they can be listed. I only looked at newer houses but beware of Chinese drywall particularly for homes built in the 05-07 range.

[EdBowers]

The order by which you can get the best deal is normally: auction, short sale, then REO. A short sale and an REO is processed through a normal closing and will give you clear title, in other words there will be no unknown liens after you own it.

For auctions there can a huge backlog of HOA fees, tax liens, second mortgage and so on. When you buy at an auction you are formally just buying the first loan - everything else stays (you also have to pay cash within 24 hours).

Short sales and REOs are just like normal private sales, with the exception that short sales can take a very long time due to the additional documentation needed from the seller about to default on their loan. In both cases you will be able to see the property before buying it, while an auctioned property you will not.

All realtors deal with short sales and REOs, the tough part is finding one that can assist with auctions. They basically need to have a very aggressive title person able to request estoppel letters from the HOA so you can figure out the backdues. I usually just look at the final foreclosure judgement and figure they stopped when they stopped paying the loan. Very risky, but an auction was my best deal BY FAR. Then you can compare to other liens put on other units for HOA backdues and see how much is added on.

The seller pays the buyer's realtor and their own a total of 6 %. It would be crazy to pay anyone else something on the side.

Always make sure to do a demographics analysis before buying - it's illegal for a realtor to help you with this.

Before making an offer you should also always request 1 year of comparables for the complex from your realtor.

If you know exactly what you are doing and have the time, auctions are great. The bank does not have to pay the 6 %, they don't have to worry about any back dues or closing costs so they are willing to sell them at 20-30 % below market value.