Those who know the Florida real estate market know the influence of foreign investors. Foreign capital, especially in South Florida, has fueled real estate development in the state. Despite its slight recline with the growing strength of the US dollar, foreign investing remains a big part of the Florida real estate market.
Jerome Abecassis, a native of Paris, France now residing in Florida has made a name for himself and his company TIJ Group, LLC investing foreign capital in the Florida real estate market. Moving here in 2003, Jerome began investing in South Florida real estate and quickly established TIJ as a leader in foreign investing in the Florida real estate market. TIJ now owns and manages 200 units in South Florida and owns 160 units in the Detroit, MI area. This episode, Jerome shares his unique approach to investing and gives an outlook on the Florida real estate market.
Florida Real Estate Market
Foreign investing returning post-financial crisis
American markets seeing higher returns on investments than foreign markets
South American investing strong in South Florida market
Florida investors are familiar with the vacation real estate market; Florida is a strong, tourist-driven economy and seasonal and vacation real estate represents a large investment sector. Florida investors know that the vacation market has always offered prime investment opportunity. Despite it’s potential for success, the vacation market is a challenging and fast-paced market and many beginning investors often get caught in financial quagmires of bad investments.
Justin Ford, President of Pax Properties LLC, understands the “Florida market“. With over a decade worth of experience investing in Florida’s seasonal and vacation market, Justin has mastered real estate investing. Pax Properties currently owns and manages 30 properties (500 units) along Florida’s east coast, from Ft. Lauderdale to Jacksonville. Pax Properties has thrived due to Justin’s flexibility and ability to adapt to changes in the market. This episode, Justin shares with us his approach to marketing and investing in the Florida and shares tips and advice for beginning investors.
Florida is a strong vacation rental market
Hotels, condos, single-family/multi-family long-term and short-term seasonal rentals
Transient Apartment Licensing
Required license for operating vacation rental properties
One of the hardest things for new investors is finding a current and accurate source of real estate information; a place to find up-to-date and informative data on market trends and conditions. Even for seasoned real estate investors, it is difficult to stay on top of market research.Thankfully for real estate investors in New York and South Florida, Amir Korangy has solved this problem.
A real estate investor himself, Amir Korangy began The Real Deal magazine in 2003. At first focusing only on New York real estate markets, The Real Deal has long since established itself as an authority on South Florida’s real estate markets as well. By providing current, informative and actionable real estate data on a variety of asset classes in both New York and South Florida real estate climates, The Real Deal has become a go-to source for real estate investors. This episode, Amir shares The Real Deal’s mission as well as his personal investing process and he gives tips to new real estate investors.
The Real Deal
New York and South Florida real estate news publication
Est. 2003 – Amir Korangy, Founder
Up-to-date market reports on variety of asset classes
Updates monthly with some specific day-to-day developments
Know your neighborhood or the area where you are looking to invest in
Familiarize yourself with the market; movements and trends
Due diligence is imperative
For beginning investors, buy within means
Don’t overthink a good investment – no such thing as the “perfect deal”
Many potential home buyers enter the housing market looking for something they can call “home”. Many look for a property based on personal aesthetics. However, these may not be the best indicators of a good investment property. Buying the ‘dream home’ may require a stringent, long-term financial requirement of the homeowner; one that may limit those who aspire to build an investment property portfolio. By purchasing a property for a primary residence not as long-term commitment but as a strategic investment decision, homeowners can take advantage of a provision in the IRS Tax Code that may enable them to acquire more investment property.
26 U.S. Code § 121 – Exclusion of gain from sale of principal residence
Sale of property exempt from gains tax if property was held as principal residence for a minimum of 2 out of 5 years of ownership
Single taxpayers entitled up to $250k exemption
Joint filing taxpayers entitled up to $500k exemption
Mandatory, 2-year residency need not be contiguous
Applicable to one sale every two years, no limit on how often this may be done by homeowner
Things to Know
Look for properties that are good investment decisions
Sect. 121 only applies to exemption from Capital Gains Tax, meaning only a property that is being sold for higher than original purchasing price
Sect. 121 may not be good for those looking to have children.
Money saved in exclusion from gains tax may be used to acquire new properties
Check with tax adviser or C.P.A. for eligibility; you may still be eligible for partial exemption
Sect. 1031 Exchange – enables investors to sell a property with capital gains and receive a deferral on gains tax if purchasing a new one
If property was acquired as a replacement property and converted to a primary residence, investor must live in property for 5 yrs before qualifying under Sect. 121