represents one of the most notorious bubble markets
in the United States. According
Properties Investor Network, Miami’s prodigious rise and
precipitous decline have served as a warning sign for the potential disaster
that can await income property investors attempting to time value bubble
Miami is a unique market area since it is segmented between two
distinctly different classes of properties. These two classes are single-family
homes and high-rise condominiums. The importance of distinguishing between the
two comes from the fact that high-rise condominiums bore the brunt of Miami’s
value free-fall while single-family homes are showing signs of stabilization. Platinum Properties Investor Network believes
that investing in Miami condominiums is still problematic.
The collapse of values in Miami began in 2007 and
continued through 2011, as properties were lost to foreclosure at record rates.
Most of the value collapse in Miami was driven by the high-rise condominiums
that came to exemplify the real estate bubble. For investors who purchased at
the market highs, Miami has been a roller coaster ride of value destruction as
leveraged losses escalated higher and higher. As 2011 comes to a close, many
forecasts are indicating that Miami will begin approaching its bottom.
Upon hitting its cyclical bottom, it is likely that Miami will
regress back toward a very modest rate of long-term appreciation. This process
will be impacted by the release of foreclosure inventory that is being held by
banks in the hopes that it can be introduced to the market after values have
stabilized. There is a slight possibility that investors who buy into Miami at
the right time can realize some value appreciation that comes from regression
back to fundamentals off the cyclical value bottom. However, cash flow from
properties in Miami is still quite low, relative to the current market values.
According to RealtyTrac,
foreclosure filings rose in Florida, where 23,569 properties were reported in
August, a 5 percent increase from July, but 59 percent below the level reported
for August 2010, according to the latest RealtyTrac® U.S.
Foreclosure Market Report. Florida
had the seventh highest rate in the country with one in every 376 housing units
with a foreclosure filing in August.
Five market areas that are currently favorable for income property
- Atlanta, GA – Population to grow 43% by 2025
- Dallas, TX — Favorable business and tax climate
- Indianapolis, IN – One of Forbes top 10 cities
- Phoenix, AZ – The main Southwest commerce hub
- St. Robert, MO – Rapid job growth for next 5-10 years
Platinum Property Investor Network uses
return-on-investment (ROI) predictions for each individual market are based on
three fundamental components not considered by other forecasters. Income
property, unlike other investments, is a multi-dimensional asset class. The
first is component appreciation (or depreciation), which is based on a
composite of forecasts from CNN Money,
Fortune and Hartman’s innovative Regression
to Replacement Cost™
methodology. The second is leverage. The reason Hartman’s
methodology separates appreciation from leverage is to pinpoint how much value
is coming from the asset itself and how much is coming from financing benefits
when acquiring the asset. The final component of the ROI predictions is cash
flow where income property can be compared to bonds and dividend-paying stocks.
Platinum Properties Investor Network’s model is the only one of its kind that
includes a full ROI build. Most forecast reports begin and end their analysis
with value appreciation or depreciation. Hartman and his team understand the
full dynamics of return on investment and have chosen to create and report a
complete ROI analysis for each of the targeted market areas.
About Platinum Properties
Platinum Properties Investor Network was created to help people
achieve The American Dream of financial freedom by purchasing income property
in prudent markets nationwide. Designed by Jason Hartman, the company’s Complete Solution for Real Estate
Investors™ is a comprehensive system providing real estate investors with
education, research, resources and technology to deal with all areas of their
income property investment needs.
Through podcasts, educational events, referrals, mentoring and
software to track investments, investors can easily locate, finance and
purchase properties in exceptional markets with confidence and peace of mind. For information, call
714-820-4200 or visit Platinum Properties Investor Networkonline.