Flamingo Listing Agents: Top 10 Tips and Open House
Dear Flamingo South Beach Listing Agents,
This is Juan Leal, Mr. Flamingo South Beach, we need to sell out the Flamingo Condos and need your help. If you have a Flamingo Miami Beach Condo listing that is NOT over priced we want you to join us for our Flamingo South Beach PROGRESSIVE OPEN HOUSE on Saturday, April 5th, (open to any suggestions on the dates based on feedback). Please contact all your South Beach Sellers and see if you can get the maximum price reduction possible to create some sales. This is a win-win if we have some 20 or so serious buyers walking around the Flamingo condos to take these units off the Miami Beach market. There are some great units and prices in the Flamingo South Beach building. I’m sure we will have something sold soon with the recent Flamingo North Tower Cancellation. I personally have 3 potential buyers (not those crazy investors that want to buy at 50 cents) for 1 Bedrooms waiting, one with money already in Escrow. I’m getting leads everyday but don’t have the right priced inventory. Let’s compete together instead of against each other.
Listing Tips (I’m probably not the fastest or smartest or the “mostest” here…. But i can share some generic tips that have helped me out over the years, take what you will.)
- Please Answer your phone or return calls the same day if it all possible, even if you have to text while your showing.
- Work out Showing instructions IN ADVANCE with current tenants, find out their schedules. If a buyers agent calls you it shouldn’t take you 6 hours to find out.
- Have a key with you at all times, even if its in lockbox or owner lives there, your never know when someone might “lose” your key.
- While this is difficult and unlikey all the time, try to personally show and help your follow buyers agent, they might not know as much about the building or perhaps you can find out their buyers level of motivation.
- Get a price reduction today! Fact is most owners will lose money in this market. If they don’t want to reduce, then drop the listing and call them in a few months when they will be more motivated.
- If your listings is about to expire, relist it with a new MLS number/ agreement, change the pictures, descriptions or adjust the price and finally add an extra bonus point to the buyer’s agent, if at all possible. This is sure to give it some renewed energy. If you know some other top agents consider working the listing together as they might know another realtor or buyer who will cause it to sell.
- Pictures sell, words tell. Get a nice camera and take pictures of the inside of the unit (yes stop stealing generic photos of the property grounds!). If your unit has a view and you haven’t photographed after 3 weeks perhaps you are not serious about selling. Out of state buyers check on realtor.com and other sites and they will skip over your listing.
- Get a nice website to showcase your listing for your own buyers or to syndicate it online. A very inexpensive solution I use is www.point2agent.com
- Reply to this email and lets’ pull our resources to advertise for this upcoming Progressive Open house.
- If you are a Flamingo Condos owner reading this and thinking of selling please Check out this Free online book first as it will help you in the process.
I would be happy to help anyone if you have any further questions or ideas for this open house. Read this post: How Progressive Oppen Houses Work and call me or email if you have any further questions. For sales information, contact Juan Leal at (305) 975-7472.
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I’m curious what you think is a fair price psf for a bay view unit in the Flamingo. While I am truly interested in buying there (as somewhere to live, not an investment), I think prices today are way too high.
As an example, let’s use the 1 bedroom pre-foreclosure short sale that you posted on March 11, $379,000 for 785 sf or $483 psf. As you stated in your blog, the rent on such a unit could be as high as $2,000, taxes $540 and fees $450. Using those numbers, even if one were able to rent out the unit at that maximum rent level, the annual income would be $12,120 per year, equating to a 3.2% cap rate. That figure also assumes no downtime, management fees, leasing commissions, etc. When one considers where interest rates are today, why would anyone buy a unit at that price when it is clearly cheaper to rent the exact same unit?
Of course in the past, buyers were willing to pay such low cap rates due to the expected increase in value, but with a bay view unit in the Floridian going for $360 psf versus $480 to $600 listing prices in the Flamingo, betting on capital value increase could only be described as lunacy. Maybe those investors looking to buy at 50 cents on the dollar are not the crazy ones?
Mark,
You didn’t mention the fact that Floridian has a maintenance that is almost double that of it’s counterpart at the Flamingo. This is the very reason the Floridian unit may be priced at $360k. YOu also either forgot or aren’t aware that the maintenance at the Floridian doesn’t include, wi-fi, a Barton Membership or free a/c like it does at Flamingo, which would save anyone a bundle each month. You can’t compare those two very different products.
Mark,
The truth is your individual circumstances will determine whether it makes more sense to buy now. In general investors expect a larger return when investing in high risk income properties (think Allapattah neighborhood near downtown miami). The Cap rate may vary in different areas of a city for many reasons such as desirability of location, level of crime and general condition of an area. You would expect lower capitalization rates in South Beach or a more desirable area of the city and higher cap rates in less desirable areas to compensate for the added risk.
Since March 2007 the supply for south beach apartment rentals has increased faster than the demand. Long Term Rental Rates in Flamingo South Beach have decreased approximatly 10%, however rents are beginning to stabilize and should pick up by this time next year making this a viable investment. Also more crucial is your ability to increase income by managing the property as a short-term vacation rental. A property which you can enjoy while vacant and demand $2,500 or more a month. Some of my clients even advertise themselves to save the leasing commissions. I think this will bring you to an acceptable Capitalization Rate of 5% which will increase as rental rates bounce back up.
Despite the slowdown brought by the current US housing and credit market crunch, the overall real estate trend for Miami Beach has been relatively stable. The worst of the downturn has already past Miami Beach (people are NOT buying at over-inflated prices) and we should expiernce some modest price appreciation by the end of 2009. Before you decide if its right for you make sure you consider all the complex factors involved in such a decision such as the personal benefits of having a South Beach condo or Vacation Rental, phantom cash flow (depreciation tax benefits), interest taxes deduction, loan amortization and appreciation in the next few years. To answer your question I believe this property should sell for $350,000 minus repairs.
Finally while they are definitely some other deals to be found in the Floridian I haven’t yet been able to find the 360 psf one you mentioned. The lowest priced direct bay One Bedroom is listed at 476 psf while the Flamingo, if it sells for $350,000 will be almost 25 psf less. Please post the Floridian unit number in question and I’d be happy to research it for my next post. Thanks.
Gisselle, the maintenance cost differnece comes out in the cap rate calculation, as the net operating income is affected by higher maintenance costs. Also, the additional ammenities you mentioned are also priced into the cap rate, as if occupiers actually value these services, it increases the rents.
Juan, I saw the Floridian unit in this blog: http://www.miamicondoinvestments.com/2008/03/11/the-floridian-3-bedroom-condo-foreclosure-in-south-beach-a-fantastic-deal-at-444900/
I understand that you COULD increase the rental return on your property by renting it out on a short term basis, but in so doing, you take on more risk…that’s why hotels trade on 8-9% cap rates. I agree that South Beach should trade on a lower cap rate than other parts of the city or country, but it should not and will not trade at a valuation where buyers lose money. Despite their comments to the contraray, I would be surprised if MCZ/Centrum renewed their option on the Flamingo, given their troubles elsewhere and the direction of prices. That would free up AIMCO to sell the Flamingo as part of their $2 billion disposal program in ‘08. I would expect an institutional buyer to pay a 5% to 6% cap rate MAX in the current environment, which implies a $200 psf price. Now if we see more trouble in the financial markets, that psf price is only going in one direction. Of course the condo units should trade at a premium due to their higher specification, but not a 100% to 200% premium as the current listing prices would imply.
Mark,
That’s a great post but you are not comparing apples to apples. First we all know the price per square foot is usually higher on smaller units so just comparing a one bedroom to a three bedroom would not be an accurate assessment of its intrinsic value.
Second you we are talking about a Foreclose bidding war and are unlikely to get it. Like Lechuga comments:
“A client submitted a bid on a foreclosure property in South Beach about a month ago and we were told that there were 8 other offers on the table. We didn’t get it.”
Lastly you are talking about a commercial investment of an apartment complex. This is not the same as purchasing an individual condo unit. If you really want a hot deal I got a Foreclosure at Flamingo for 276 psf, check out my latest post
http://flamingoexpert.wordpress.com/2008/03/17/flamingo-south-beach-foreclosure-217/
Your new listing helps prove my point. As I said in my previous post, I would expect the rental units to be priced at about $200 psf and the condo units to trade at a premium to that. $250-260 psf for non-bay views sounds about right, and I guess we are almost there. Are you advising seller to re-calibrate their pricing based on this listing and surely more to come?