Don't Believe All Those Stories About Florida Property At Pennies On The Dollar

Charles Hanes
January 21, 2012

Many of you who have been reading my blog for the past few years will already know that I balance my business between Toronto and Florida condos.  Ever since the bubble burst in Florida due to the Sub-Prime debacle newspapers and blogs in Canada have been writing about how you can buy Florida properties for pennies on the dollar.

Those familiar with my web site and blog will already know my fundamental philosophy when it comes to published articles and promotional material in this industry:  "believe nothing that you hear and half of what you see"!

The fundamental truth is that you always get what you pay for and it is as true in Florida as anywhere else. Bottom line, you can buy quality properties down here for pennies on the dollar!

You have to understand that about a decade ago, when Toronto real estate prices took off again after a long hiatus, Florida properties shot up astronomically resulting in a faulty valuation where prices inflated to almost double and in some cases triple what the true market value was.  So if, today, you find a property advertised at 50 cents on the dollar you want to realize that it's 50 cents on the inflated dollar or possibly simply coming back to its true market value.

Last winter there were high rise condo buildings that were half empty and buyers bailing out of their deals but large "Vulture Funds" showed up and snapped them up for pennies on the dollar but they were buying entire buildings.  They then rented out the units because with all the people bailing out of the "below water" mortgages rentals were the golden goose.  They got good rents as the demand was so high.

Today they are selling these units with good to excellent "Cap Rates" (return on investment) ranging from 7% - 9% (in Toronto you are lucky to see positive cash flow from an investment unit)!  The massive inventory of condo buildings that offered these "pennies on the dollar deals" is now gone and you could only have gotten such a deal if you had millions to invest as you would have had to buy the entire building.

Now I know there is someone out there that knows somebody that knows somebody that knows somebody who bought a $300,000 unit for $75,000 - $100,000 and, in life, there are always exceptions to the rule, but that somebody bought that unit a year or three ago and if you are thinking of buying now, get over it, there simply are not deals like this on the market today.

We've been working the market hard down here in south east Florida and have managed to find some quality investment opportunities ranging between $200 - $300 per square foot.  I will only invest in or advise my global investor network to invest in "quality real estate" because the only kind of real estate with which you will make money is "quality real estate".  This usually constitutes about 25% of the total inventory out there.

If you are thinking of investing in Florida my professional opinion is to come to south east Florida where the population is strong, demand is strong, economics are strong and you stand to see a positive return on your investment.  Don't chase pipe dreams about pennies on the dollar as they are just that, pipe dreams.  Sound investing does NOT include chasing pipe dreams.  It relies on solid proven principals, a sound strategy and old fashion leg work.

When you Register with me, you get all three.  That's why I've prevailed over the past three and a half decades in good market and bad markets and I still have a broad investor/client list, many of whom have been with me for years if not decades.

I'm Charles Hanes