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Wednesday, October 4, 2023

The Real Estate Boom Has Created A New Get-Rich-Quick Frenzy In South Florida

Special ReportOcala, Florida–Five years ago, it would have been unthinkable to hear people talk or even brag about their quick profits in buying and selling land, which have become the new commodity for average people who want to jump on the bandwagon in their quest to strike it big in the real estate boom. Walking through the shopping mall, taking a trip to the doctor’s office, venturing outside the church building after Sunday mass, average “Joe” people discussing buying land or pre-construction homes seems to be the most thrilling sensation for those who want to talk about business and profits.“Since December of 2003, I have closed hundreds of deals for customers from South Florida,” says Patricia Greene from Watson Realty. CSMS Magazine spoke to her out of her office located in the North Florida town of Keystone Heights, a small country town in Clay County, about 30 miles East of Gainesville. Keystone Heights, with a population of one thousand, is one of the newest frontlines, hotly contested by Haitians, Jamaicans, Puerto Ricans and many others. For years, few people in South Florida have heard of Clay or Putnam County, the county next door to Clay, which is also the scene of major competitions in the real estate market. Now, these names have become household words—thanks to weekend talk shows on Planet 17 and WLQY 1320 AM, the two most popular stations for Haitian listeners.While Keystone Heights remains hot, Lakeland, a suburban town near Tampa, Citrus County, on the Gulf of Mexico, Greater Ocala and now the Florida Panhandle are as hotly contested as Clay County. Panama City, the so-called Redneck Riviera of the United States and the internationally renowned paradise for its breathtaking sandy beaches, is the newest destination for the “conquistadors.” That market, however, appears to have become more and more difficult for small investors, who do not have the cash to enter the game of Panama City, where one acreage can be sold for well over a 100 K. So two hundred miles to the East, around the town of Lake City, a new frontline has emerged.Here, because it is usually too costly and sometimes too stressful to deal with county bureaucrats in terms of getting permits to subdivide plots of lands, many landowners simply sell their chunks relatively cheap, to make a quick profit and swiftly get out. “Small investors can still play the game, if they are smart,” says Richard Guy, a Jamaican-born developer who has made millions buying big chunks of lands at three to four thousand dollars an acre and then reselling them at the current rate, which is about 25 K per quarter of an acre. “Since I was a kid, I never wanted to be behind the curve of any competition. I was either ahead of the curve, or I was moving with the curve,” adds Guy, smiling and displaying an awesome pride of his newfound success. Flipping Real Estate Contracts: The New Trend But if buying and selling land still remains the most popular form of making profit for small investors, buying pre-construction homes is fast becoming the new substitute for the land market, which is getting more and more difficult for average people, as the prices get maxed, especially in Florida. “In two years, I made $200 K in pre-construction homes. I always flip my contract before the house gets even built. You ought to be smart to play that game,” admits Ricardo Montanez, a small investor out of Port Saint Lucy.Yes, “flipping” is the new popular practice in real estate. The investor buys a contract from a builder, takes advantage of the high fluctuation of market capitalization in the pre-construction business, waits for it to accumulate equity (since the prices change almost weekly) turns around and flips the contract to someone who wants to get into the game. It’s a practice where the legality and morality of it are still being disputed. Nonetheless, no one cares. Investors believe that the benefit of entering the game, even at a higher price, far outweighs the risk.Small Investors Are Totally Shut Out In South FloridaIn South Florida, small investors are completely shut out. And what is fueling the housing boom here? According to Sun-Sentinel, relocating executives, retirees and foreign investors are the main drive behind the soaring prices of the South Florida market. With so many people who are coming down with a one-way ticket almost daily, real estate brokers are in a constant struggle to keep up with new demands. While prices are on the rise, observers last year witnessed a drop in sales by up to 21 percent in Broward and 14 percent in Palm Beach. “[Only] Miami Dade County saw a four percent increase in sales,” says Alexandra Navarro Clifton of the Sun-Sentinel. It is becoming more and more too expensive to buy an average home in South Florida. The ordinary citizen simply does not have the means to buy. Professionals like teachers, nurses and social workers can only dream of a decent home in this part of Florida.Again, according to the Sun-Sentinel, it costs 93 K more to buy a house last May than it did at the same time last year in Broward County. “I’m going to have to move somewhere else. I’m a teacher, and I have been trying to buy a small house for months. Everywhere I go, I’m told that I don’t qualify,” says Jean Robert Destin, a young Haitian teacher in Broward.Watch Out For The Leprechauns!While it’s been hard enough for the average person to find a real way to possess a home, there are predators who somehow still find sneaky ways to scoop their victims up with their “fishing nets.” A few months ago, rumors were circulating about a possible Texas cheap land deal near El Paso, not far from the Mexican border. CSMS magazine checked on the reliability of those rumors, but could not find anything serious, other than the horrible testimonies of many victims of a scam to lure people into buying land in places that they don’t even know about, let alone knowing anything about the real estate market in the areas they have been forced to buy. The community of home and land buyers must be ever vigilant. All eyes must be open and directed against shameless and greedy crooks who make their living by preying on the weak and most vulnerable of our society. Real estate investment is a strategy game that requires a certain level of knowledge of the market before jumping in. One needs to know the market prospectus of the area he or she intends to invest in. Buying swampy and deserted lands will not make anyone get rich, as the “leprechauns” are leading their victims to believe. Be very careful of what you are purchasing, as even cheap land payments can add up over time and become quite costly. You don’t want to lose your carefully gathered “life savings.” Go inspect the land you’re buying from your realtor, making sure it’s exactly the type of land it’s promoted to be, and that you’re not buying a giant sinkhole full of undevelopable sand, murky waters, or possibly even mud.BE AWARE! BE CAREFUL!

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