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COVID-19 Migration Creates Unique Fix-and-Flip Opportunity in Florida

Real estate markets do not react favorably to uncertainty. With the presidential election looming and the continued COVID-19 pandemic impacting the economy, there is a substantial amount of continued uncertainty in the cards for the foreseeable future. It is clear that both urban and suburban markets will see wide ranging and disparate instability as a result.

With Mortgage rates at historic lows the demand for housing is at the highest levels in the last 25 years. This demand has caused a shortage of housing inventory in highly desirable suburbs and non-urban areas. Developers and builders nationwide have focused on these opportunities with new projects and investments.

Invitation Homes, one of the nation’s largest rental-home development companies recently announced plans to invest over $1 billion on acquiring SFR units in key markets primarily located in Florida and Texas. Further, a recent report on U.S. home flipping statistics compiled by ATTOM Data Solutions indicates that while the use of the fix-and-flip investment strategy declined from 7.5% to 6.7% of all home sales on a nationwide basis, the gross profits of these flips spiked nearly 8% higher from the first quarter to the second quarter of 2020—which is over a 10% annual increase from 2019.

Florida has the fourth highest population in the US. The recent market trends have seen a boom in the fix and flip market in Florida. Before the pandemic, increased migration was trending upward based upon factors including the absence of state taxes, lower population density, great weather and more wide-open space. The health and financial concerns from the pandemic have only made Florida more attractive for those seeking to flee urban areas throughout the country. Clearly, Florida fix and flips and multi-family investors will profit from an array of trends impacting migration.

Across the United States, homebuyers are moving to locations that offer lower tax markets and increased employment opportunities. With Florida governor Ron DeSantis lifting restrictions on the Sunshine State’s restaurants and other businesses, there has been an unfettered return to business as usual which appeared to synch with earlier predictions by real estate experts that Florida would prove the fastest to emerge from the COVID-19 crisis. 

At the Law Offices of Lawrence Andelsman P.C., our expert attorneys will guide you and provide you with the direction and counsel needed in the commercial and private lending space. We offer a wide vary of services that include nationwide closing and settlement, commercial and private lender representation, review and negotiation of master loan purchase agreements and filing and structuring legal business entities. To learn more about how our attorneys can help you with your next fix and flip deal, reach out today!