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Your next real estate investment needs to be thought out carefully. Taking the plunge into an unknown opportunity is far too risky, particularly here in South Florida, as many investors have learned the hard way over the last decade. To improve your chances of success and maximize your working capital, it’s important to do your homework.

If you’re looking to invest in a condo project, avoiding these five common mistakes will help you avoid prevalent market traps and spot a genuine – and profitable – opportunity.

1. Buying at inflated prices: Don’t buy condos in a heated market, as the prices will be inflated. As the saying goes, you make money in real estate by how much you pay for it, not how much you ultimately sell it for.
2. Falling for developer hype: Heated markets inevitably attract amateurs out to make quick money. Developers will spend thousands of dollars making the project sound amazing, but a lot of their products lack design and quality. If you’re looking at a particular neighborhood, buy from a local developer with a successful product portfolio.
3. Not having a game plan: Before investing in a condo project, you need to formulate a specific plan. Ask yourself: will you manage the property yourself? Are you familiar with capital gains taxes? Is residential real estate the best project for you? If you don’t answer these pertinent questions in a way that makes sound business sense, you run the risk of losing your capital or worse.
4. Buying in an uncertain neighborhood and location: All condo investments hinge on their location and the surrounding neighborhood. This doesn’t mean that you should confine your buying to gentrified neighborhoods, but the project needs to have good resale and rental potential in order to be profitable.
5. Intending to sell before the project registers: Avoid new construction projects if you are not in a position to obtain a mortgage when they register. Condo assignments are flooding the market and a lot of them are selling below their original purchase price.

To be a savvy and successful investor in the condo market, you need to look at several deals before deploying your capital on those with the most potential. Over time, you will start thinking creatively and acting on instinct when you craft deals – two abilities that mark the successful investor. If you’re thinking about investing in a real estate project, we’d be happy to help. Please contact us today to learn more!

Florida Construction lien law contains many notice and deadline requirements and failure to comply with the requirements of Florida Statute Sect. 713. Unfortunately, a common occurrence among contractors is the attempt to inflate a claim of lien amount due to various reasons, either an attempt to offset potential costs and fees that will be incurred in enforcing the lien or simply to intimidate the property owner to resolve the matter. Many times it is done as a result of the contractor anger in providing work and payment to subcontractors and then having the homeowner fail to make payments to the contractor.

The filing a fraudulent lien in Florida means that a contractor intentionally misstated certain information on the Claim of Lien that is untrue. This action on the part of the contractor can result in severe penalties. The contractor would likely be subject to the loss of his lien and the imposition of attorneys fees against the non-prevailing part. It is strongly recommend to be as accurate as possible when determining the amount of the lien and be certain to have the necessary documents to support the amount detailed in the claim of lien.

Ray Garcia, Esq.
Board Certified in Real Estate Law
By the Florida Bar
www.floridaconstructionlawgroup.com

As tenant’s counsel you want to secure provisions in the lease agreement that the landlord’s build-out work as stated in the plans and specifications consists of items that a landlord may be required to complete by law such as local building code compliance work, structural work, roofing work and ADA compliance. In order to avoid the confusion as to what work would be considered the obligation of the landlord and what build-out work would be considered the obligation of the tenant, you would want the obligations spelled out in the lease agreement. Also, as an additional measure of precaution a tenant may want the landlord to complete his portion of the work at his expense and prior to the landlord turning over possession. This will avoid confusion and disagreements going forward.

Ray Garcia, Esq.

Board Certified in Real Estate Law

by the Florida Bar

www.floridaconstructionlawgroup.com