21 Feb 2008 08:37:06 | Chris Anderson, PhD
YEEHAW!!!!!! The south will rise again!! Can't you just imagine
the Dukes of Hazard boys sitting on the hood of their car (the
General Lee) grinning in front of a For Sale sign in their yard?
Well, they should be smiling with the prices in the south, and
especially in Florida. But will this Florida real estate trend
continue? That is the $100,000 question.
We just recently taught a class at the Learning Annex in NYC
about investing in Florida real estate. As I was preparing for
this class, I was just constantly shocked by some of the facts
that I was gathering…. and I live in Florida and have done so
most of my life. So the question becomes "is this just an over
blown Florida real estate bubble or is this something that is
likely to last?"
Let me give you an example of just how wild Florida real estate
has become. Recently, somebody just made a purchase of the
LARGEST track of land that his been purchased in Florida since
1965. Back in 1965, some crazy dude named Walt Disney purchased
30,000 acres in a relatively unknown place (at the time) called
Orlando. At the time, the locales who sold their land went
laughing all the way to the bank about this guy.
This recent Florida real estate purchase, however, was 28,000
acres at a price of $30,000/Acre. No big deal, right? Wrong!!!
This land was purchased around YEEHAW Junction, Florida! Ever
heard of it? Most people have not. Yeehaw Junction is off of the
Florida Turnpike in Osceola County. This is one of those places
that you could drive through 10 times and still not have noticed
it.
If you are like most people, then you would have to assume that
big groups are buying these large tracts of land with the intent
of rapidly developing them and selling them during this crazy
real estate market. Nothing could be further from the truth.
What these groups know is that that the population of Florida is
expected to increase by 35,000 people, per month, for the next
30 years. So month, after month, after month, you have people
pouring into the state. So if you are one the big Florida real
estate groups with tons of money in your pockets these days,
what would you do? Buy the land in cash and sit on it for years
--- also referred to as "land banking."
Now if you are familiar with the Florida real estate of
yesteryear, you would have to assume that most of this
population growth is from fixed, low income, retirees that are
coming into the state. Wrong again. Today, and in the
foreseeable future, you actually have very wealthy individuals
coming into the state, possibly for long term retirement. The
difference is they have lots of money, are willing to spend it,
and are accustomed to nice life styles.
Whenever there is money flowing, then you obviously create
business opportunities and job growth. As a consequence, many
locations in Florida are exploding within the 20-40 year old age
group. With this kind of real world demand floating around, the
opportunities are endless for savvy Florida real estate
investors.
Of course, you can not just blindly make investment choices,
especially if you live outside of the state. Some areas have
become investor dominated and could be a bit scary in the
shorter time scale. Over the longer time scale however, the
future looks very bright, especially in the area of land
investments and affordable housing.
In the Learning Annex class in NYC, my suggestion to investors
interested in Florida real estate is either learn how they can
use preconstruction investing to easily make investments in
Florida or else move and get involved in more active investing
styles. For preconstruction investing, the trick is to 1) find
an emerging area poised to explode, 2) find a project within
that area that is high demand and is in preconstruction, 3) ride
the appreciation curve while you may not even own (yet) the
property. People have made money by the boatload over the last
few years doing exactly that and "aw shucks, we only have
another 15+ years to go before it runs out".
Now do you want the really good news? This is not just limited
to Florida real estate! In our group, we are making multiple
investments in many locales all being driven by the baby boomer
shift and its far reaching impacts. In my opinion, if you want
real estate investing to be a major factor in your financial
future, learn what the boomers want and then buy in front of
them.
About Author :
Dr. Chris Anderson is a co-founder of
www.GetPreconstructionDeals.com and is referenced in many venues
including the New York Times and USA Today. Download his free,
30+ page preconstruction investing ebook today at Get
Preconstruction e-Book