Apartment Buildings for Sale In Fort Lauderdale FL
Where to Find Apartment Buildings for Sale in Fort Lauderdale, FL
Okay, so let’s talk about some neighborhoods where you can pick up good multifamily apartment buildings in and around Fort Lauderdale. It’s becoming more and more difficult to get good cash flowing apartment buildings in the heart of Fort Lauderdale and surrounding neighborhoods, but there are some neighborhoods where there’s still good opportunity depending on the types of property that you’re looking for and the type of investment that you’re looking for. Properties are similar in size and construction, but the neighborhoods have different characteristics depending on what sort of investor you are.
Let’s start with Victoria Park. It has been really popular in recent years and back in 2010, 2011, 2012 it was a very, very good investment and it was still possible to pick up apartment buildings at a price where cash flow was still strong. Today, a lot of appreciation has happened. There’s been a lot of development in the neighborhood, a lot of properties have been torn down and replaced with new construction townhouses. Victoria Park is a great neighborhood because it’s essentially locked on all sides and can’t really expand. And due to the zoning in the city, the city’s zoning laws there, high rise construction is not possible at this date either.
So Victoria Park is bordered on the North side by Sunrise Boulevard, on the West side by US 1 (Federal Highway), and on the South side by Las Olas Boulevard and downtown Fort Lauderdale. On the East side it’s bordered by the Intracoastal canal. So Victoria Park itself cannot really grow outside of that, it’s a very well defined neighborhood. It’s an older neighborhood, well established, and it has a lot of older construction homes and small apartment buildings.
Now, what’s happened over the past few years is there have been a lot of investors going in there and buying up apartment buildings because there are a lot of small multifamily apartment buildings in that neighborhood. And what these investors have done is they’ve gone in, picked up apartment buildings where one bedroom rents might have been $800 with owners who had owned them for 20, 30 years.
New investors have gone in and turned those apartments around modernized them, installed new kitchens, new bathrooms, really made them nice, even though they’re smaller apartments (since they were built in the 50s and 60s). But they’ve brought the finishes up to today’s standards and have been able to reposition to a totally new demographic, typically millennials who are looking to live, work, and play near downtown.
Millennials love Victoria Park really just because it is right beside downtown Fort Lauderdale and has a very “old Florida” sort of feel to it. It has a lot of character. It is a five minute bike ride to the beach, and it’s just a cool trendy neighborhood, lots of bars and restaurants in the area. So it’s a great live, work, play location and investors have jumped on that and have done very well in that neighborhood. The downside now in 2020 is that a lot of that value add play has worked through its entire course. So a lot of the old apartment buildings that were there five, six years ago have already been repositioned. So finding deals in that neighborhood is extremely challenging, and the prices have really gone up very high. We were buying in that neighborhood in 2013, 2014 picking up deals in the range of about $90,000 to $100,000 a door. And today deals that are listed are selling for $175,000 per door plus. So it’s definitely become a top neighborhood. The rents have also gone up quite significantly over there.
One bedroom apartments that are remodeled can rent anywhere on the low end from $1,250 a month up to I would say $1,450 or $1,500 depending on the amenities in the property. Now, new construction around Victoria Park is renting for much higher than that, but that’s a completely different product to your typical older apartment building built in the 1960s. The new construction projects have more amenities such as swimming pools, gyms, larger units, etc. So that’s an overview of Victoria Park. It’s still a great place to invest, especially if you’re looking to invest long term. I think really over the long term that neighborhood is only going to get more valuable. And though there might be some ups and downs in the values there, I think long term it’s going to be a good investment.
So if you are the type of investor looking for a very strong neighborhood with good demographics near to good employment, lots of nice retailers, and restaurants in the area, this is the sort of neighborhood you should look at. It’s still possible to pick up deals that cash flow, but obviously the cash flow will be lower than if you were in a less desirable neighborhood. However, good deals are still possible. If you want an appreciation type play with some cash flow but protecting your equity is the biggest concern for you, this might be a neighborhood that you would consider.
Another neighborhood that I really feel good about in Fort Lauderdale, a great place to pick up property right now, is in and around the Croissant Park neighborhood. Now, Croissant Park itself is a fairly small neighborhood, but just around that, there are other neighborhoods, maybe not under any particular names, but I would say in and around the Croissant Park area.
Where is this in relation to Fort Lauderdale? It’s located southwest of downtown Fort Lauderdale, north of Hollywood-Fort Lauderdale International Airport. So kind of the intersection between U.S. 1 (Federal Highway) running north-south and State Road 84, running east-west. Croissant Park is on the northwest corner of that intersection.
So why do I like this neighborhood? There are a couple of reasons. Number one, it’s within a very short commute to downtown Fort Lauderdale, so that’s great. Right now a lot of the service employees for downtown Fort Lauderdale and the airport and many of the healthcare workers for Broward Health live there in Croissant Park and around that area.
I like it from the perspective that it’s a very strong demographic, lots of employment in the area, very convenient commute to downtown Fort Lauderdale. It’s also an easy commute east-west because you’ve got I-595 running east-west just south of this neighborhood, maybe a mile South, so that’s easy. And then it’s also in close proximity, but not too close, to Fort Lauderdale-Hollywood international airport. So that’s great. We’ve actually had tenants in some of the properties we manage there who are flight attendants or even a couple of pilots in the past. It’s also right beside Port Everglades. So just a good location in terms of finding people with strong employment.
Now the other reason I like the neighborhood is that there is still a good amount of older product. There are many small apartment buildings, anywhere from duplexes up to 20 to 30 unit apartment buildings. And just like all across South Florida, prices have been going up, but it’s still possible to get good cash-flowing deals in this neighborhood with some upside available through re-positioning.
The other thing that kind of sets this neighborhood apart from Victoria Park is when you drive into it, it doesn’t the same sort of nice trendy feel that Victoria Park has. However, the area has zoning that is generally more favorable for future development and just depending on what areas you’re buying in, there’s a lot of commercial retail product along the U.S. 1 Corridor. So a lot of these apartment buildings are actually in areas that probably over the next five to 10 years would be really good spots for potential development.
There are high-rise buildings in the area and a couple of large hotels. So the potential for someone to buy a multifamily apartment building in this neighborhood, hold on to it for five to 10 years, and then have it be purchased by a large developer is definitely a possibility there. From that point of view, I think it’s a really strong location.
The downside of the location I would say is also due to the nature of it being right there in the middle of a lot of commercial development. It’s a little bit of a busier location, a little noisier, with not quite as nice of a feel to the neighborhood as Victoria Park or some of the more residential-feeling neighborhoods in and around Fort Lauderdale.
A third neighborhood where you might want to consider buying apartment buildings in and around Fort Lauderdale, FL is Lauderdale Manors. It’s located East of I95 and North of Sunrise Boulevard. So it’s still East of 95 which is desirable for a lot of people and makes the commute into downtown easier. And it’s right there just North of Sunrise Boulevard, which is a major east-west artery in Fort Lauderdale. So it’s very easy for residents here to hop on a bus or jump in a car and get to downtown Fort Lauderdale or jump on to 95 and go North or South. So from that point of view, it’s really convenient. It’s definitely one of the less developed neighborhoods because it’s a little further West of downtown. So one of the less developed neighborhoods in the East Fort Lauderdale area or East of 95 area. And subsequently, it’s definitely a lower income demographic that lives there. It’s probably got a slightly higher crime rate than the downtown Fort Lauderdale area and the schools aren’t as good and that sort of thing. But having said that, the rent to value ratios in this neighborhood are some of the best in and around Fort Lauderdale.
It’s a fairly small neighborhood. So there aren’t many apartment buildings, but as a proportion of the total properties in the neighborhood they might make up 10-20%. There are between 8 and 10 streets that have primarily apartment buildings on them. But if you can pick those up at a good price they make solid investments and you can really do well. I think the neighborhood is going to do well over the long term simply because it’s one of the neighborhoods that is the most affordable for service employees and blue collar families to live in that’s still near to downtown Fort Lauderdale. So, for example, good size two bedroom, one bathroom apartments in that neighborhood would rent for somewhere between $1,200 and $1,300 a month as of this writing. It’s a lot cheaper than something in the Victoria Park neighborhood where a two bedroom apartment will rent for $1,800 plus.
I think that in the current market, affordable housing is very tough for people to find and it’s not really being built just because the construction costs are too high for the amount of rent that you can get. Yes, you’re going to rent units for less than you would in another location. You should also be able to pick up the apartment buildings for less than you would pay in another location. And to be honest, the management is definitely more intensive in this neighborhood. You just deal with the typical problems that come from lower income housing – higher vacancy, more residents who may struggle to pay rent on time, or residents who are one or two paychecks away from an emergency. However, underwrite the investment taking these factors into account and you will be okay.
You just have to factor in the fact that if you’re going into a deal in this neighborhood that there’s going to be a little more lost on the vacancy and collection side. However, with good screening and good management (we manage a lot of property in this neighborhood) it still can be a very strong investment. And I think that buying affordable apartments over the long term is a good strategy and it’s something that’s definitely needed. We get very busy with prospective tenants anytime we list property in this neighborhood for rent. It has a very strong rental demand. There’s just not a lot of affordable housing available near downtown at this sort of price.
If you are looking for a little bit more cash flow on a deal and you’re willing to take a little bit more risk with maybe a neighborhood that’s a little more prone to crime and a little bit of vacancy or collections costs, then this might be the neighborhood that you would consider.