How can The Gibson Group make my investment a sound one?

When and how aggressively to invest is extremely tailored to an individual’s needs, resources and objectives. Ideally, a personal meeting with Rick Gibson to discuss your investment questions or objectives is recommended; however, the following are some of the most basic types of opportunities, which are worthy of discussion:

1. Quick Return
This approach to real estate investing, can be compared to day trading in the stock market, and generally involves a very active, experienced investor committed to full-time investing. The quick return approach involves finding opportunistic situations such as foreclosures, short sales, and people in need, then matching them to another party by assigning the contract before taking actual ownership. The profit may be in the form of a fee, rather than equity growth. These quick return strategies are considered relatively risky and therefore generally are not recommended.

2. Flipping a Property
The expressions “flip” or “fluff-and-flip” are sometimes used to describe the process of finding a home that needs work and can be purchased at a low price with the intention of fixing it up to sell, in order to turn a profit. This was extremely common for many years, but is considered most profitable in a seller’s market because the cost to hold a property until it resells was relatively minimal. At this time, in order to maximize the sale price and the profit margin, a property generally needs to be priced high relative to comparable homes. As a result, the property may take too long to sell at non-competitive prices. Although prices right now are ideal for acquiring properties to “flip”, The Gibson Groups considers the length of time to sell too long to make this approach viable, unless a rental period is considered in the strategy.

3. Development
Recently, extreme focus by developers on the South Florida market has resulted in some dramatic changes to the landscape, property values and the ambience of many previously worn areas. This has led to the “pre-construction” investment market, which in some cases can be very profitable.

Luxury condominium projects and upscale, high-end town homes have dominated this development market. The current trends appear to provide more affordable properties. Some of the urban, transitional areas such as Flagler Village and Progresso are springing up loft style homes and a broader range of styles and prices than ever before. Obviously this is a highly specialized investment strategy that does not affect the average investor.

The Gibson Group’s marketing expertise and experience selling directly to buyers for owner occupancy has, however, made working with developers a much higher priority moving into the future. Developer’s early reliance on Realtors or Realtor groups who sold only to investors looking to “flip” the properties seems to have waned, since the “flipping” strategy as described above, is not as lucrative as it was during times of limited supply and higher prices.

4. Cash Flow Properties
Properties purchased for the objective of delivering cash flow can be extremely profitable as a strategy especially with tax advantages and appreciation during the ownership period. The favored properties of The Gibson Group to meet cash flow objectives are always directly tied to purchase price, since the return on investment will be a function of combined rents, less all expenses of course. Tax benefits, as well are extremely significant.

The savvy investor will learn that some of the most profitable rental properties are often located in areas that are not currently considered upscale, but rather may be worn areas, but positioned geographically for future growth potential.

To make a positive cash flow property work, significant down payments to decrease loan amounts and interest rates are generally recommended. Since the outlay of cash may be significant, the return on this investment should be compared to other returns available for cash investing. Since some opportunities, such as the stock market, are currently delivering high returns, each has its own risks.

Cash flow potential will be much higher in multi-family properties and apartment buildings. Multi-family properties or apartment buildings also offer an opportunity for conversion to condominium complexes with shared amenities, separate folio numbers, and individual future sales that can provide a fantastic exit strategy from ownership over a period of years.

5. Appreciation
Over a period of time, this is the single biggest strategy for return, regardless of whether a property is a primary residence, second home, rental, or otherwise. Current market condition are believed by many to be the underlying biggest opportunity of all investing strategies in South Florida, since properties can now be purchased for below appraised values and are believed to have considerable equity.

Investing is a relatively complex, personalized topic. It is one that particularly warrants a meeting with Rick Gibson to discuss objectives, and opportunities. From reviewing recommended geographic locations to analyzing cash flow potentials, there is a wealth of information available and a variety of topics, which may be important before investing.