Navigator Consulting
Aug 11, 20111 min
According to the US National Association of realtors, international sales of US property rose to $ 82 billion between April 2010 – March 2011, up from $ 62 billion in the previous year. By our estimates, approximately $ 25 billion has been invested by foreign investors in Florida in the past 2 years.
Some characteristics of the market under study included:
Focus on rental residential real estate with focus on suburban properties with 100 – 300 units. These properties have seen occupancies decline from 90% to 70-75%, and rents for 1-bedroom / 1 bathroom apartments set at between $ 550 - $ 650.
Despite this decline, average EBITDA values remain high, with returns of 40-50% possible.
Most properties are managed on a stand-alone basis; there is abundant potential for cost savings through economies of scale, synergies and application of modern customer relationship management (CRM) and software monitoring techniques.
The property rebound is only just beginning to touch this segment: most foreign property investment remains concentrated in urban high-rise developments, where prices are recovering quickly.
Mortgage finance remains available, with 25-30 year loans at interest rates between 5.5-6.5% common.
Navigator is currently promoting investment in a group of three high quality residential properties in Tampa, Florida. Total units number 544 with a target sales price of $ 36,000 per unit. The total investment amount is $ 19.5 million before closing costs. Annual income is forecast at $ 3.2 million; annual operating costs are $ 1.6 million.
Interested investors are requested to contact Philip Ammerman on pga@navigator-consulting.com