Renting and flipping new Miami condos is all the rage

The majority of new condo buyers in Miami have been looking to capitalize on their investments by flipping the units or renting them out, according to research by CraneSpotters.

Looking at the four largest condo towers completed in greater downtown Miami since construction resumed in 2011, anywhere from 45 percent to 96 percent of the units sold by the developers in each building were placed back on the market or put up for rent. That indicates a high level of investor ownership in those buildings, and also raises some questions.

With more than 18,100 condo units either under construction, planned with approvals or proposed in greater downtown Miami, according to CraneSpotters.com, is there enough rental demand at higher price points to support that many new units? And how will they be impacted by the nearly 7,800 apartments in the development pipeline?

The recently completed condo towers in Miami sold in the mid-$400s per square foot, but the average price per square foot for new projects is more than double that now, CraneSpotters principal Peter Zalewski said. When the sales prices climb, so must rents. Are there enough high-earning renters in Miami to fill those units?

"We strongly believe that when Brickell CityCentre opens and people will be able to walk to a shopping mall with a Saks Fifth Avenue, 11 cinemas and 500,000 square feet of retail, Brickell condos will raise in value and so will rents," said Carlos Rosso, head of the Related Group's condominium division. "Twenty-four-hour urban living close to the workplaces is and will continue to be in high demand."

Here’s a look at how the four largest recently completed condo projects in Miami have performed:

Nine at Mary Brickell Village

• Units: 390
• Units sold/price per square foot: 300 for $501
• Active MLS listings/price per square foot: 17 for $469
• Units resold: 0
• Asking rentals/price per square foot: 95 for $2.78
• Closed rentals/price per square foot: 23 for $2.47

1100 Millecento Residences

• Units: 382
• Units sold/price per square foot: 376 for $435
• Active MLS listings/price per square foot: 99 for $403
• Units resold: 1
• Asking rentals/price per square foot: 67 for $2.59
• Closed rentals/price per square foot: 120 for $2.25

BrickellHouse

• Units: 374
• Units sold/price per square foot: 374 for $504
• Active MLS listings/price per square foot: 91 for $627
• Units resold: 7
• Asking rentals/price per square foot: 64 for $3.63
• Closed rentals/price per square foot: 77 for $3.24

MyBrickell

• Units: 192
• Units sold/price per square foot: 192 for $360
• Active MLS listings/price per square foot: 31 for $379
• Units resold: 8
• Asking rentals/price per square foot: 19 for $2.67
• Closed rentals/price per square foot: 126 for $2.01

It looks like some of these condo towers are more like apartment buildings. Projects in other South Florida cities have behaved quite differently. For instance, in Broward County’s largest newly completed condo tower:

Beachwalk – Hallandale Beach

• Units: 300
• Units sold/price per square foot: 289 for $448
• Active MLS listing/price per square foot: 49 for $532
• Units resold: 1
• Asking rentals/price per square foot: 6 for $2.97
• Closed rentals: 0

There's a fair amount of resale activity, but not many rentals. However, Beachwalk has a rental pool system managed by the hotel management that doesn't show up on MLS, so many unit owner participate in that. CraneSpotters.com also looked at the largest recently completed condominium in Palm Beach County, Bay Colony Juno Beach, and found only two of its 121 units on the rental market, although it had 23 resales.

Reposted courtesy of Brian Bandell and South Florida Business Journal

Original post appeared here: http://www.bizjournals.com/southflorida/news/2015/07/10/renting-and-flipping-new-miami-condos-all-the-rage.html?ana=e_sflo_bn_newsalert&u=kjqD4NmNTYzv1JVDYuD+8WZzhLb&t=1436798791

Q&A: FICO executive on credit scoring changes

 

NEW YORK (AP) – July 13, 2015 – Your credit score is an important bit of information that determines a lot about your financial life. But if you wanted to be in the loop, it came with a price tag.

That never seemed fair, but now consumers can increasingly see their FICO score for free – the three-digit number that determines if you'll be approved for a credit card or loan.

Fair Isaac Corp., the company that developed the FICO score, has been working with credit card issuers and lenders to allow them to show customers their FICO score online or on monthly statements. Seeing the score frequently pushes consumers to improve their finances, says Jim Wehmann, a vice president of FICO's scores business.

People with higher FICO scores, which generally range from 300 to 850, are offered lower interest rates on mortgages or have an easier time getting approved for credit cards or loans.

FICO scores are calculated using information from your credit report, a detailed list of your past and current debts. But roughly 45 million Americans have no credit history or credit score, according to the Consumer Financial Protection Bureau. FICO is developing a scoring system for these so-called "credit invisibles."

Wehmann offered insight on what you should know about your credit score. Excerpts have been edited for clarity and length.

Q: What's the fastest way to improve your FICO score?
A: Always make your payments on time. Roughly 35 percent of your score is based on payments. That's going to be the most important factor.

Q: What hurts your score the most?
A: Not making your payments on time. Delinquencies and other negative events – collection items, bankruptcy, foreclosures – will have a significant negative impact on your score.

Q: What's the biggest mistake people make when it comes to their FICO score?
A: Not fully understanding that the behavior that they take today could impact their score and their ability to get credit later.

Q: It has become easier to get a free FICO score. Big credit card issuers, such as Discover, Chase, offer the score to their customers for free. How did that happen?
A: We launched something called FICO Score Open Access, which allows lenders to freely share with consumers the score that the lender is using. We launched the program two years ago and it's grown significantly. About 65 million people right now are eligible to get their FICO score for free through their lender, and we expect that number to grow over the coming months. There's a lot of attention given to the largest financial institutions, but we're working with credit unions, community banks and smaller organizations.

Q: Is it true that each person has several different FICO scores?
A: Yes. We have a few different versions. Some lenders use older versions of the scoring methodology, and some are for specific types of lenders.

Q: Who are the credit invisibles?
A: They're called invisibles for a couple of reasons. One is they don't have credit scores. Some don't have credit files, so they have no credit history; no credit card or mortgage or auto loan or personal loan. No data has been captured by the credit bureaus. They're young people who are just starting out, who don't have any credit, or they may be immigrants to the country where they don't have a U.S.-based credit history.

Q: What information does FICO need to create a score?
A: From a FICO perspective, they are unscorable because we don't yet have six months of history on them, or we haven't had an update in six months.

Q: If there's no credit history, what information will you use to build their score?
A: Wireless or landline or cable bills.

Q: When will that FICO score be used?
A: We're in a pilot phase. We've built the score and we are right now working with lenders for them to validate the score based on their actual applications.

Q: When will it be ready?
A: We have 12 lenders in the initial pilot, so we're going to wait until they do their validations before we make it widely available to all lenders, probably by the end of the year or first quarter of next year.

Copyright © 2015 The Associated Press, Joseph Pisani. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Reposted Courtesy of Associated Press. Original Post Appeared Here: http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=3&id=325542

Latin America buyers dominate South Florida property sales

Latin American buyers account for more than two-thirds of all foreign property sales in South Florida, USA, a new report reveals.

Around 68% of international buyers in Miami are from Latin American countries, with Canadians and French and Italians also in the top 10, according to the 2014 Miami International Buyer Survey conducted by the National Association of Realtors.

Christopher Zoller the 2015 Residential President of the MIAMI Association of Realtors and a Coral Gables Realtor, says, “International buyers have long been attracted to Miami’s world-class art, beaches and amenities.

“South Florida’s proximity to Latin America and the Caribbean and our more than 1,000 multinational companies offer so many opportunities for foreign real estate consumers. Faced with volatile economies in their homelands, South Florida real estate is considered a secure place to invest one’s money.”

The survey ranks buyers by countries and highlights key characteristics of foreign buyers and shows there are more foreign buyers in Miami than in the rest of the United States. A preview was featured at the March R.E.A.L Awards and Real Estate Summit hosted by the Greater Miami Chamber of Commerce.

Almost three-quarters (72%) of Miami-Dade and Broward members reported working with an international client, around two and a half times the national average of 28%, according to NAR data.

The top countries for consumers purchasing properties in Miami-Dade and Broward counties are:

• Venezuela
• Argentina
• Brazil
• Colombia
• Canada
• France
• Mexico
• Italy
• Ecuador
• Peru

Foreign buyers spend more on properties than domestic buyers in South Florida with a mean purchase price of US$444,000, which is higher than the mean purchase price of all Florida closed sales ($245,000) and the median sale price in Miami-Dade ($215,000) and Broward ($185,125).
They also buy more higher-end properties compared to all buyers in Florida, with 28% of South Florida foreign buyers purchasing properties valued at US$500,001 or more.

Overseas buyers prefer condominiums in the central/urban areas, which they intend to use mainly for vacation and rental investment purposes.

Around four out of five international buyers (81%) in South Florida purchase properties with cash and the figure is even higher for new-build sales at 90%.

Most MIAMI members speak at least two languages, so are in a good position to maximise foreign sales. In Miami 73% of Miami agents reported working with a foreign buyer, compared to 60% in Broward.

The MIAMI Association of REALTORS partners with more than 125 organizations worldwide and conducts international outreach on a global level. It  represents more than 35,000 real estate professionals in all aspects of real estate sales, marketing, and brokerage and is the largest local Realtor association in the United States.

*Sotheby’s International Realty says Miami is one of the top two fastest growing housing markets.  Despite many claims that the market would take a decade or more to recover from the Recession from 2007-2009, Miami is the most active construction market throughout the US, with the exception of New York, according to its latest Trends Report.

Key points from the report:

·         The Mid Beach area has trended steadily upwards at a 77.1% increase over the past five years.

·         Miami’s waterfront Islands are home to some of the most affluent citizens of the world. Indian Creek’s 86 residents’ net worth is estimated at over $37 billion, which is greater than the gross domestic product of half the world’s nations.

·         The average home in Gables Estates is priced at $9,250,000, up a huge 64.9% over 2013 levels.

·         Surrounding communities in The South End area such as Coconut Grove and Coral Gables have additionally increased 20% more than 2013 levels.

·         In 2014, all areas in Miami Beach had double digit price growth compared to the previous year

Daniel de la Vega, President and Managing Partner at One Sotheby’s International Realty says, “In 2014, the dominant trend was continued price increases with fewer transactions. We expect this will continue into 2015. We project the luxury, single-family market will remain strong. While global economic conditions are shifting, which may extend market times, the level of demand for luxury, single-family far outweighs current supply. Although this level of appreciation is not realistically repeatable year-over-year, continued double-digit gains are expected during 2015 provided interest rates remain low.”

The market for condominiums is aimed almost exclusively at luxury ($1million-$5million) and ultra-luxury ($10milliomn-plus) buyers. Additionally, without exception, Miami’s Beach’s South Beach (with South of Fifth) and Miami’s North End submarkets are the strongest in price and pre-construction availability. Recent development initiatives such as the Miami World centre, a $3billion dollar master plan in the downtown area demonstrate that the city has become a magnet for investors on national and international levels.

Reprinted courtesy of Author Adrian Bishop and OPP.today

Original article: http://www.opp.today/latin-america-buyers-dominate-south-florida-property-sales/