Need help with three-property purchase... Miami

General Real Estate Investing
1

So I am sitting on a Duplex zoned for residential 2 in Miami. The area is about to be annexed into a very desirable city within the county. The properties on both sides of my duplex have gone up for sale. To the left lies a duplex identical to mine. To the right lies a 4-family apartment complex.

Here’s what I am thinking. I suspect that if I can acquire all three properties, there is a strong possibility that they can be sold together at a price greater than their aggregate individual prices, especially considering the propensity for development within the area. My difficulty lies in the fact that none of these properties can generate sufficient rent income to sustain the mortgages I would have to pay. My solution is to get these properties under contract, at the lowest possible deposit amount that the buyers would accept, and then shop the properties out in an effort to assign the contracts. But if I fail to do so, I would lose all my deposit money.

I am not crazy about taking out an ARM or Interest-Only mortgage to hold me over, but it may be an option I should consider. To be honest, I am not even sure where to begin as far as contacting developers is concerned (I have some ideas, but none really make me want to jump up and expose myself to personal liability), and 90 days may not be enough time to find an interested developer. I know that forming an LLC or some other form of corporate entity can help me avoid personal liability, but I may not be able to get the entity up and running before another buyer snatches these properties up. Even so, getting these palces under contract with such favorable buyer terms may be a pipe dream.

So what are you guys thinking? Any suggestions would be greatly appreciated.

2

Let me add that all three properties are zoned for four family apartments, even the duplexes… We are talking about 30,000 square feet of lot size with all three properties combined.

3

this looks like land speculation; not REI

while the impedning annexation may really help your value, I am very doubtful of your assertion that you would sell the 3 lots together for a price higher than individually. Even in places like SoCal where big lots are non-existant, larger lots go for LESS per unit area and most people subdivide to increase value.

Moreover, you seem to suggest that you lack financial resources to be able to carry these properties for some people of time. Thus trying to pull-off a quick turn-around/assignment deal is pretty tricky unless you have an established pipeline of folks that you shop this deal out to.

It really looks like you are asking for trouble (IMHO); that my 2 cents.

Happy Investing

4

Mike is right.

It seems like a rather large undertaking when you are only speculating about the potential return. If you had a network of contacts built up and some were showing interest, then it may make sense to take the risk.

Even in the best of situations “quick turnarounds” can hit snags or go bad.

5

Good points gentlemen… I am currently speaking to a trusted friend who is a developer in the area. I will keep you posted on how this turns out. I understand the skepticism about large lots, but residential 2 zones in this area are tough to find, especially with such a large lot size available. We’ll keep in touch.