Your Guide to Florida Property Investment for Global Buyers: Owning, Investing, and Enjoying the Florida Lifestyle

By Lee Mirman and Lisa Mirman

Lisa and Lee Mirman, Duke University MBAs and international property experts have built their Florida real estate practice on uncompromising ethics and transparency, and they want to share their knowledge and experience with you. This book, written for the international buyer, is a ‘must-have’ guide for anyone looking to invest in the Florida property market and lifestyle. Discover why, for many of Lee and Lisa's global clients, Florida property is one of the best and most secure property investments in the world today.

Detailed step-by-step processes for buying, managing and selling your Florida home
-How to choose the best professionals to work with
- Where to invest, with market synopses on Florida’s popular areas
- How buying and selling real estate in Florida differs from other parts of the world
- How to understand real estate contracts, inspections, insurance
- How to make owning property in Florida enjoyable, profitable and hassle-free with sound tax and legal planning advice

• Language: English
• Publisher: BookBaby
• Release date: Jan 5, 2015
• ISBN: 9780991493739

Book preview

Namaste.

TABLE OF CONTENTS

WHO WE ARE

WHO IN THE WORLD ARE YOU?

ACKNOWLEDGEMENTS

FOREWORD

THE PROBLEM OF DIS-INFORMATION

THE BRIEFEST HISTORY OF FLORIDA

WHY INVEST IN FLORIDA?

LIFESTYLE: LIVING IN AMERICA & CULTURAL FAMILIARITY

LOCATION & CLIMATE

FINANCIAL: HOLDING INVESTMENTS IN U.S. DOLLARS

TRANSPARENCY

THE ECONOMY OF FLORIDA

PROPERTY PRICES

CASE STUDIES

4 MOST IMPORTANT THINGS TO REMEMBER

1: YOUR FLORIDA PROPERTY SEARCH

THE FLORIDA PROPERTY MARKET

OPPORTUNITY FOR GLOBAL BUYERS

REAL ESTATE VS. OTHER ASSETS

THINGS TO CONSIDER

TYPES OF INVESTMENT

ONE FINAL OPTION FOR INVESTING IN REAL ESTATE

COMMON QUESTIONS AND CONCERNS FROM GLOBAL BUYERS

HOW TO FIND A PROPERTY? GET A REALTOR

MLS - MULTIPLE LISTING SERVICE

INTERNET SITES - ZILLOW, TRULIA, REALTOR.COM

FOR SALE BY OWNER (FSBO)

POUNDING THE PAVEMENT

TYPES OF FLORIDA PROPERTY

OCEANFRONT, GULF FRONT AND WATERFRONT PROPERTY

SINGLE FAMILY

CONDOS

TOWNHOUSES

RETIREMENT HOMES/VILLAGES

HOMEOWNERS’ ASSOCIATIONS

GATED COMMUNITIES

FORECLOSURES AND SHORT SALES

PROCESS OF A FORECLOSURE

PROCESS OF A SHORT SALE

WHERE TO BUY IN FLORIDA?

MARKET SUMMARIES

SOUTHEAST QUADRANT

SOUTHWEST QUADRANT

NORTHWEST QUADRANT

NORTHEAST/CENTRAL QUADRANT

FINDING A REAL ESTATE PROFESSIONAL

WHAT’S THE DIFFERENCE BETWEEN A REALTOR, A REAL ESTATE AGENT, AND A BROKER?

WHY AN EXCLUSIVE BUYER’S AGENT WORKS BEST

WHAT REALTORS BRING TO THE TABLE

INVESTMENTS IN FLORIDA REALTOR REFERRAL PROGRAM

CHECKLIST FOR CHOOSING A REALTOR

INTERVIEWING A REALTOR

REAL ESTATE PROFESSIONAL CERTIFICATIONS

THE FINAL DECISION: 3 FINAL FACTORS TO LOOK FOR

2: THE BUYING PROCESS

INTERNATIONAL SALES

SHOWINGS AND OPEN HOUSES

MORTGAGE PRE-APPROVAL

MAKING AN OFFER

CONTRACTS

OFFER ACCEPTANCE

HOME INSPECTION

PEST INSPECTION

HOW INSPECTIONS PLAY INTO INSURING YOUR PROPERTY

INSURANCE

HOMEOWNERS’ INSURANCE

WIND POLICY

FLOOD INSURANCE

WHEN AND WHERE IT CAN FLOOD

SURVEY

APPRAISAL

TITLE INSURANCE

WAYS TO HOLD TITLE

INDIVIDUAL OWNERSHIP

U.S. CORPORATE OWNERSHIP

FOREIGN CORPORATE OWNERSHIP

U.S. LIMITED LIABILITY CORPORATION OWNERSHIP

CLOSING PREPARATIONS

ESTIMATING PURCHASING COSTS

THINGS THAT NEED TO BE IN PLACE PRIOR TO CLOSING DAY

CLOSING DAY

CLOSING FORMS

PROFESSIONALS YOU NEED & WHAT THEY DO

HOME INSPECTOR

MORTGAGE BROKER

INSURANCE AGENT

PEST INSPECTOR

APPRAISER

ESCROW AGENT

TAX ACCOUNTANT

CLOSING AGENT

FINANCING

FINANCING OPTIONS

TYPES OF U.S. MORTGAGES

ESTIMATE OF FINANCING COSTS

BUYERS’ QUICK REFERENCE COST GUIDE

3: OWNING A FLORIDA HOME

REAL ESTATE TAXES

PROPERTY TAX

FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT (FIRPTA)

UTILITIES

ELECTRIC

PROPANE AND NATURAL GAS

WATER/SEWERAGE

TELEVISION

INTERNET

WASTE COLLECTION/RECYCLING SERVICES

BANKING IN FLORIDA

UNITED STATES BROKERAGE ACCOUNTS

MOVING MONEY INTERNATIONALLY

IMMIGRATION: ENTERING THE U.S.

VISAS OVERVIEW

VISA WAIVER

TEMPORARY VISAS

WORKING VISAS

LONG-TERM VISAS

EB-5 INVESTMENT VISA

CITIZENSHIP

SCHOOLS AND UNIVERSITIES

BOARDING SCHOOLS

STUDENT VISAS

GETTING MEDICAL CARE IN FLORIDA

FLIGHTS TO AND FROM FLORIDA

MEETING PEOPLE FROM YOUR HOME COUNTRY

4: MANAGING A FLORIDA HOME WHILE ABROAD

ABSENT OWNERS

MAINTAINING YOUR HOME WHILE YOU’RE AWAY

RENTING YOUR PROPERTY

PREPARING YOUR RENTAL PROPERTY

PHOTOGRAPHY

MANAGING YOUR RENTAL

CONDOMINIUMS

SINGLE FAMILY HOMES

HIRING A RENTAL (A.K.A. LEASING) AGENT

INSURANCE FOR YOUR RENTAL PROPERTY

UTILITIES FOR RENTALS

TAXES ON RENTAL INCOME

5: SELLING YOUR HOME

THE PROCESS

WHAT ROLE DO REALTORS PLAY IN SELLING?

PREPARING AND STAGING THE PROPERTY FOR SALE

LISTING AGREEMENT

THE IMPORTANCE OF PRICE

MARKETING YOUR PROPERTY

CHOOSING TO SELL YOUR HOME YOURSELF

TAX IMPLICATIONS

CAPITAL GAINS

FOREIGN INVESTMENT REAL PROPERTY TAX ACT (FIRPTA)

APPLYING FOR WITHHOLDING CERTIFICATE PRIOR TO SALE

TAX RETURNS AND REFUNDS

1031 EXCHANGE

AFTERWORD

OUR ETHOS

6: APPENDICES

SUMMARY

1. POPULATION OF FLORIDA CITIES

2. INTERNATIONAL AIRPORTS

3. FREQUENTLY USED FLORIDA REAL ESTATE TERMS

4. RESIDENTIAL CONTRACT FOR PURCHASE AND SALE

5. SELLER’S DISCLOSURE

6. HOME INSPECTION REPORT

7. SETTLEMENT STATEMENT (HUD-1)

8. LISTING AGREEMENT

9. BUYER’S AGENT AGREEMENT

ENDNOTES

FOREWORD

Historically, Florida has always been a global favourite with property investors and holiday makers alike. A large part of Florida’s appeal lies in its wonderful sub-tropical climate, Caribbean waters, and sunshine. There will always be an abundance of people looking for holiday homes, vacation rentals, and to spend time in the sunshine state, escaping colder climates elsewhere. This—along with favourable tax laws and guarantees on property ownership—gives the Florida property market a solid and secure foundation. And makes it not only a great investment and a great financial choice for your primary residence should you choose, but an unbeatable lifestyle choice overall, in our opinion.

In recent times of economic turbulence, some great opportunities to achieve value have been presented—whether by fluctuating home currencies giving foreign buyers a price advantage—or property prices falling and offering ultra-affordable Florida lifestyle. Savvy investors have taken the leap to move their money, to what was a slightly distressed market after the property bubble burst. Now, as the market recovers and finds its equilibrium, there are still opportunities to be had. And for international investors with the right information at their fingertips, there are some great opportunities to achieve both long-term financial returns, and a piece of our priceless Florida lifestyle.

While Florida has always been able to play the weather card, and we don’t doubt there will always be plentiful customers for the wares which Florida offers, we do feel that there are large numbers of people who jump in to the Florida property market either ill-informed, ill-advised, or both. It’s a huge state, and there are myriad micro-markets which need to be understood intimately in order to make the ideal property choice for you. You need to consider not only your investment dollars, but your family’s needs and the lifestyle you desire. Balancing these factors is an art form, one we’re adept at. But all-too-often we see buyers from abroad falling prey to unscrupulous or incompetent agents, Realtors, or insurance vendors—and subsequently making poor decisions purely based on lack of information or mis-information.

In this guide we will provide a wealth of information gleaned over three decades in the Florida property market. We’ll endeavour to steer you through the choppy waters of making an international real estate purchase in the state of Florida, so you understand each step, and are better able to make smart decisions which allow you to enjoy all the wonderful things that come along with purchasing a slice of the Florida dream.

We will also strive to find the right Realtor to represent you in your search, through the Investments in Florida Realtor Referral Program at www.InvestmentsInFlorida.com, a referral network of personally vetted real estate professionals. These are professionals in their field whom we believe to be the best in their particular areas of business. Above all, we want to provide good, solid, information, so that when you come to make a property choice you’re doing so from an informed position with good knowledge of the processes involved, the pitfalls to be aware of, and the right questions to ask of everybody involved: from your Realtor and inspectors, to your vendors, and closing agent.

We’ve been in this game for a long time—35 years in fact. We’ve seen it all: from people making the right property investment, which will grow and accumulate equity for their children’s and grandchildren’s futures, right through to people who’ve been taken advantage of, had poor information, and lost as much as half a million dollars in a single year on a home they bought. Above all, what 40 years have taught us is that knowledge is power. And in real estate, knowledge is gold dust. We hope this guide will help you going forward as an informed, savvy real estate investor.

The Problem of Dis-Information

Everyone is in the information business. And consumers nowadays like to drink up information as if it is water and they just finished a 10-hour desert hike. Now everyone is an expert at everything. The problem is that most of the information being consumed is inaccurate, and most of the people selling or sharing the information are misinformed themselves. Recently, we were corrected by one of our newsletter readers whose unique circumstance wasn’t applicable to our general statement. After doing extensive research she found an answer more suited to her needs. And therein lies the conundrum: is everyone’s situation that unique or do they just think it is? For most people the answer is no: their situation has been experienced before. Yes, there are twists, nuances, and turns, but an expert will have the experience to find the solution. A lot of solutions have been created, we each do not need to recreate the wheel.

What we need to do is to seek out the advice and guidance of people who are really good at what they do and can provide the solution to the problem. We are in the relationship business and we stress multiple times each day that we work with people who we know, like and trust AND who possess proven expertise. The point is that as you contemplate your next real estate purchase in the United States, and in Florida in particular, it is critical to get good advice for this transaction, and this information may be different from your last purchase in Florida or your next purchase in Florida. It needs to be current, relevant, and on the money; information only an expert, not articles or internet searching, can provide.

This kind of nuanced advice is based on much more than a one-size-fits-all generalization. It’s based on what you are buying, your expectations for ownership, and your own life circumstances at the moment. Is this property for investment? Or a place for your kids to live while attending university in the U.S.? Is it to rent now and live in later? Are all of your kids grown now, whereas your last purchase was when you were vacationing together? Perhaps you have considerably more money than you did previously?

This book will help you establish a baseline under-standing of the current state of the market and give you the knowledge to go forward with confidence. Our mantra in business is to get good information so that we can make informed choices. We meet too many people who made the wrong choice because of bad information—sometimes the fault of others and sometimes their own—or by not following their instincts. Remember, everyone is the information business and has something to sell. Your job is to get the best information available that pertains to your situation.

The Briefest History of Florida

We are not historians, so we’ll make this quick. In 2013 Florida celebrated 500 years of its first real estate transactions. Ok, that is not necessarily the case, and we are sure that there are many interpretations of the story! Spanish colonists established the city of St. Augustine in 1565, but early explorations are recorded in the area as early as 1513—way ahead of the celebrated pilgrim forefathers who would make their landings in the North Eastern United States much later in 1620. As was the case in the bloody history of the New World, it was a brutal situation of first-come-first-served. If you came by boat to discover a place, the fact there were indigenous populations was irrelevant, because they weren’t visible. You claimed it as your own.

The Spanish colonists ruled the state from St Augustine, which formed part of the Viceroyalty of New Spain, Cuba and the Spanish Empire until 1763, when Spain traded Florida to the British in exchange for the return of Cuba to Spanish possession. At the end of the Revolutionary War in 1783 Britain ceded control of most of Florida back to the Spanish. Florida finally became part of the United States in 1819 when the U.S. and Spain signed a treaty handing Florida to the U.S. Eventually Florida gained its statehood in 1845, becoming the 27th of the United States, and modern Florida was born—with a mish-mash of cultures, religions and histories which are still in evidence today.

WHY INVEST IN FLORIDA?

Lifestyle: Living in America

& Cultural Familiarity

The opportunity to live in the United States for many people is a long-time dream, offering not only political stability, economic opportunity and security, but world-class education and medicine, some of the most spectacular wonders of the world, and financial incentives for businesses and entrepreneurs. In addition, for a lot of people choosing to buy Florida real estate, there is some cultural familiarity with Florida—whether from speaking the language, having family here, or having vacationed extensively in the state. Over 44 percent of the population of Florida is from European descent, it is the third most populous state in the U.S., and it is the top visitor destination in the United States: which means there is often an underlying familiarity for most people from Europe and Latin America. Remember, purchasing in Florida is also an investment in lifestyle. Life in Florida is relatively easy compared to many places in the world, and the lifestyle is one of the best on earth, in our opinion.

Location & Climate

The real reason people come to Florida to buy and own property is because, for 60 percent of the year, the weather is better here than many of the alternatives. No ice to slip on, no clouds and grey, and lots of activities year-round. Plus 1,200 miles of coastline, and 663 miles of beaches to enjoy.

North and central Florida are sub-tropical, and south Florida is tropical. This means most of Florida enjoys temperatures between 10 and 33 degrees Celsius year round and has year round, swimmable, crystal clear waters. This contributes more than just a pleasant climate: it also affects the economy of the state significantly.

This is important for real estate investors to consider: areas which experience steady and consistent growth are more likely to perform steadily as an investment. And Florida—thanks to its sunny climate—enjoys an excellent rental market and influx of tourists every year, as well as a steady flow of retirees and second homeowners looking to escape the more miserable winters in other parts of the United States, or the world. In addition to the favourable climate and 300 plus days of sunshine a year, Florida is also easily accessible from most international destinations, and boasts a wealth of natural attractions as well as many world-famous man-made tourist attractions.

While Disney is—and always will be—a fantastic draw for the state, sometimes Florida’s splendour gets overlooked in its global marketing and perception. Many people we meet when we travel around the world are surprised to learn that in addition to meeting the famous mouse, they can also swim with dolphins, watch manatees swimming in our waters, and experience the glorious peace of our everglades—one of the most diverse eco systems on earth. This is the Florida which speaks to hearts, the Florida which is sometimes overlooked, and the Florida which—in our opinion—converts holiday-makers into buyers, residents, and investors in our incredible state.

Financial: Holding Investments

in U.S. Dollars

For many people there is a strong financial factor to their decision to buy here, in addition to the lifestyle benefits. As a starting point, owning real estate in the United States allows two things: Investment in the real estate asset class as well as holding the investment in U.S. dollars. Florida then offers additional sweeteners to its real estate buyers: no personal state income tax, and homestead protection for its residents. Add to that title insurance on your home—so no one can contest your ownership (effectively your ownership of the home is insured)—and full transparency in real estate transactions, and you have an attractive package.

Transparency

In the U.S. real estate transactions are very transparent. This is why we place the emphasis on finding the Realtor first. A new listing for sale is required to be posted to the multiple listing service within 24 hours so that active listings are available to all agents. This is unlike in many other countries where buyers have to go from agent to agent to find a property. Each Realtor has access to all the listings in their local geography and can assist you in the purchase of any one of them.