PROPOSAL FOR REAL ESTATE INVESTMENT OPPORTUNITIES IN MIAMI AND MIAMI BEACH
Catalina Tirado 305-342-4987 catalina@buysellmiami.net
Robert Hibbs 305-534-8665 rrhibbs@yahoo.com
WHY MIAMI? WHY NOW? • Miami’s real estate value drivers remain – As Miami goes through one of the most predominant real estate corrections in history, it’s fundamental real estate value drivers remain • Spectacular weather • Subtropical annual temperature average: 76 F, 23 C • Year-round sunshine • World renowned beaches and crystal clear waters • Business and leisure hub for the U.S, Latin America, Europe and the World • Year-round sport, entertainment and cultural events • Miami is currently offering unprecedented real estate opportunities – Due to the current real estate market correction, Miami offers incredible opportunities for buyers and investors • Opportunities exist for developer units at discounted prices, foreclosure properties which can be acquired quickly at large discounts to market price and conventional sales which are being closed at historically low prices Catalina Tirado 305-342-4987 catalina@buysellmiami.net
Robert Hibbs 305-534-8665 rrhibbs@yahoo.com
THE BIG DROP The financial and mortgage crisis of the last years, created the most severe housing crisis in history, as can be observed on the graph below by famous Yale economist, Robert J. Shiller and co-author of the famous Case Shiller Index, which is a composite of single-family home price indexes for the nine U.S Census divisions. The US experienced a housing bubble, peaking in the second quarter of 2006. The underlying causes of the housing bubble are complex. Factors include historically low interest rates, lax lending standards, foreign cash inflows and a speculative fever. The housing market shows a dip in current market prices similar to those in the late 90s. Between 1997 and 2006, the price of the typical American house increased by 124%. This housing bubble resulted in quite a few homeowners refinancing their homes at lower interest rates, or financing consumer spending by taking out second mortgages secured by the price appreciation. By September 2008, average U.S. housing prices had declined by over 20% from their mid-2006 peak. As prices declined, borrowers with adjustable-rate mortgages could not refinance to avoid the higher payments associated with rising interest rates and began to default. During 2007, lenders began foreclosure proceedings on nearly 1.3 million properties, a 79% increase over 2006. By August 2008, 9.2% of all U.S. mortgages outstanding were either delinquent or in foreclosure. By September 2009, this had risen to 14.4%. The foreclosure crisis is responsible for the current low prices, and provides an great window of real estate investment opportunities. Housing prices are stabilizing after continuously dropping since 2006.
Catalina Tirado 305-342-4987 catalina@buysellmiami.net
Robert Hibbs 305-534-8665 rrhibbs@yahoo.com
MIAMI REAL ESTATE PRICE INDEX One of the most affected markets with the decline in prices consequence of the housing bubble, has been the Miami real estate market. Prices have gone down 47.5% since their highest point in 2006, being surpassed only by Phoenix and Las Vegas. As you will see later in this presentation, the properties our investors are buying, have discounts of 50% to 75% from their highest historic values, which is much greater than the average decline. It is very important to note, that Miami real estate prices are stabilizing, as it shows in the chart below which is a different situation from other cities in which prices continue to drop.
Catalina Tirado 305-342-4987 catalina@buysellmiami.net
Robert Hibbs 305-534-8665 rrhibbs@yahoo.com
PRICE STABILIZATION S&P Case-Shiller home price index confirms a strong stabilization in prices during the last three quarters in the Miami area, as indicated on the graph below.
Catalina Tirado 305-342-4987 catalina@buysellmiami.net
Robert Hibbs 305-534-8665 rrhibbs@yahoo.com
INVESTMENT OPPORTUNITIES INVESTMENT CRITERIA • Type of Investment: • Permanent Residence/Second Home • Vacation Home (rent for remainder of year/hotel condo option) • Income producing property (rental property) • Speculative “Buy and Flip” • Commercial Property • Budget • Conditional Factors: # bedrooms/bathrooms, condo or house, water view, etc • Location: • Miami Beach • Brickell • Downtown • Midtown
Catalina Tirado 305-342-4987 catalina@buysellmiami.net
• Sunny Isles • Bal Harbour • Aventura • Doral
• Coral Gables • Coconut Grove • Key Biscayne • Ft Lauderdale
Robert Hibbs 305-534-8665 rrhibbs@yahoo.com
INVESTMENT OPPORTUNITIES STRATEGY • Access the market at the best time, which is right now, when prices are stabilizing and starting
to increase. Purchase your primary/second home or investment property at prices that will not be possible a few years from now • Take advantage of remaining developer units at discounted prices, foreclosure properties which can be acquired quickly and at high discounts to market price and conventional properties at historically low prices • Wait for market improvement in the medium term, to sell at a high capital gain • For foreign investors, it’s a great way to take advantage of the weak dollar • Protect yourself against the probability of inflationary pressures • Take advantage of the high rental demand, which will remain due to the drop in new construction • Due to competition from other buyers and investors, you must be ready to present a strong offer with proof of funds and move quickly Catalina Tirado 305-342-4987 catalina@buysellmiami.net
Robert Hibbs 305-534-8665 rrhibbs@yahoo.com
INVESTMENT PROPERTIES - High Return Income Producing Properties OVERVIEW • Buy your investment property at below market prices, rent it to obtain a favorable net annual return and hold on to it while property values increase to eventually resell at a significant capital gain. If a foreclosure property, need to act quickly and must be a cash buyer • Grow your investment portfolio and diversify it as you desire. Each investor has his or her own portfolio and 100% control over it • Income producing properties have an objective for an annual positive cash flow after subtracting expenses associated with the properties (plus substantial tax shield benefit of depreciation write-off ability) • Take advantage of large discounts below previous sale or pre-construction prices (from 40% to 70%) • Rental projections could not be better for the next five years. According to a 2010 fourth-quarter market report from real estate firm Marcus & Millichap, South Florida's rental occupancy rate is nearly 95 percent and that number is expected to continue to increase as the economy improves • Clearly defined and standardized investment process Catalina Tirado 305-342-4987 catalina@buysellmiami.net
Robert Hibbs 305-534-8665 rrhibbs@yahoo.com
INVESTMENT PROPERTIES - PRICE TO RENTAL RATIO Price to Rental Ratio = Purchase Price Monthly Rent x 12 The price-to-rental ratio compares the rent for a property with the estimated purchase price of the same property. A lower ratio means that the difference between annualized rent and purchase costs is small, making it a better investment opportunity because the return on investment will be higher.
PRICE TO RENTAL RATIO COMPARISSON
Miami Price to Rent Ratio Average list price: $155,880 Average monthly rent : $2,165 Price to rent ratio: 6
Manhattan Price to Rent Ratio Average list price: $1,392,024 Average monthly rent : $3,742 Price to rent ratio: 31
Catalina Tirado 305-342-4987 catalina@buysellmiami.net
Robert Hibbs 305-534-8665 rrhibbs@yahoo.com
INVESTMENT PROCESS STRUCTURE
Pre-Purchase
• Investment Definition: Define the type of Investment, Budget, Conditional Factors, Location • Proof of funds (cash investment) or lender pre approval letter (if investing in foreclosures, it’s cash only offers)
SEARCH
OFFER PRESENTATION
NEGOTIATION
• New properties matching investor’s criteria are sent by email • Property income analysis sent by email (See Graph A) • If necessary, a preview of the property is scheduled • Approval by buyer or investor • Prepare offer • Send offer • Counteroffers • Offer acceptance • Define closing date
CLOSE
• Aid in the closing of the property
Refer to Post-Purchase process if buying as income producing/rental property
Catalina Tirado 305-342-4987 catalina@buysellmiami.net
Robert Hibbs 305-534-8665 rrhibbs@yahoo.com
INVESTMENT PROCESS INSPECTION
REPAIRS/ IMPROVEMENTS
RENT PROPERTY
MANAGEMENT
Post-Purchase
• Evaluate repairs/improvements needed for maximizing rental income • Send two repair/improvement proposals
• Complete repairs and improvements • Quality control and approval • Put the property on the market • Show property to prospective tenants • Negotiate offers • Receive deposits and give tenant access to the property • Maintenance services, regular property inspections and rent collection (Several property management companies available) • Periodic market updates sent to investor • Suggest market price • Put property or portfolio on the market for sale
RESALE
• Find buyers • Negotiate offers • Sell the property
Catalina Tirado 305-342-4987 catalina@buysellmiami.net
Robert Hibbs 305-534-8665 rrhibbs@yahoo.com
OUR TEAM
Experienced in both commercial and residential real estate, with a background in Industrial Engineering, Catalina expertly puts together complex deals for the most demanding and knowledgeable buyers and investors. Her loyal customer base expands from Miami to South America and Europe, and they rely on her professionalism, international experience, strong negotiation skills and deep market knowledge. She has been able to adapt to the current market condition by expanding into bulk and distressed property sales, thus providing her clients an array of investment options. She provides excellent residential and commercial real estate, relocation, property management and international services. Originally from Colombia, Catalina is completely fluent in English and Spanish.
Robert has spent more than 15 years advising clients and managing investment portfolios. During the past seven years, he has focused exclusively on purchasing and selling investment properties in the Miami and Miami Beach areas and in identifying investment opportunities and managing portfolio investments for himself and for his clients. Prior to this time, Robert worked in the field of corporate mergers and acquisitions. He has sat on the Board of Directors of several public and private companies. Robert has a BA from the University of Colorado and a Masters Degree in Business Administration from the Wharton School at the University of Pennsylvania.
Disclaimer: All information provided in this proposal comes from sources deemed reliable, but no warranty or representation is made as to the accuracy thereof and same is submitted subject to errors, omissions, changes of price, rental information or other conditions, without notice. Users of this information do so at their own risk and agree that no liability of any kind will be imposed on Howard Chase Real Estate, LLC or any agents acting on behalf of Howard Chase Real Estate, LLC with respect to the accuracy of said information.
Catalina Tirado 305-342-4987 catalina@buysellmiami.net 1354 Washington Ave, Miami Beach, FL 33139
Robert Hibbs 305-534-8665 400 Alton Rd, Suite #1203 Miami Beach, FL 33139 rrhibbs@yahoo.com