Seven months ago, Josh Woodward, a restaurateur who owns South Beach’s Table 8, signed what he thought would be his last short-term lease. Tired of renting, he was ready for his own piece of the real-estate pie.
“I felt like a chump for missing out on the meteoric rise [of the real-estate market], when people were buying multiple units pre-construction,” admits Woodward, 35, who’s been spending $4,500 a month on a 2,000-square-foot two-bedroom, 2 1/2-bath apartment in South Beach’s Murano Grande since the building opened four years ago.
But given today’s softening market, Woodward recognizes that holding off on buying might have been a blessing.
“There are so many people who bought multiple units that come closing time, they can’t make the final payments and are trying to unload at low prices,” explains Woodward. “You can step in their place for 15 percent less than what they spent pre-construction.”
Joonok Yang, owner of Miami Investment Property, who specializes in pre-construction, high-rise, waterfront properties in Miami Beach, seconds Woodward’s logic.
“Any time you buy pre-construction, you should buy at the very beginning or the very end, when the building is getting ready to close,” she says. “Then you’ll find some people who are financially not as solid as they were three years ago and just want to get out.”
But cashing in isn’t so simple. As soon as Woodward started scoping the market, the good deals just kept getting better.
“Each week, you open up the real-estate section on Sunday and prices for a two-bedroom have come down $25,000,” says Woodward, whose Table 8 franchise is set to expand to Manhattan’s Cooper Square Hotel in eight months.
For that reason, Woodward is waiting once again, hoping that in a few months he’ll have even more opportunities and be able to afford an even more luxurious property.
On his radar is the Continuum II, located on the tip of South Beach in the South of Fifth (SoFi) area. Yang says some pre-construction units went for about $500 a square foot in 2003 and 2004. Early buyers interested in unloading units, Yang says, will “probably want you to pay closing costs and real-estate commissions, so you’ll end up at $600 a foot.”
The developers have been selling units with direct ocean views that originally sold for $1,000 a foot for $1,400 a foot today. “But if you’re smart and want to buy something, you won’t buy the last few units from the developer,” Yang says. “You’ll wait until the building is going to close and find the investors who bought in for very low [who are] willing to sell for a small profit to avoid a carrying cost.”
Woodward has also looked at other SoFi buildings such as Apogee.
“I will make some offers if I fall in love, but offers that I’ll feel really good about,” he says. “I’d like to see what’s left at the end of the season when these speculators will be even more desperate.”
That is if he opts for a condo at all.
“What’s scary is that depending on how many people default, the monthly maintenance could go through the roof,” Woodward says.
His other option is a house.
“I’d like a dock and to be right on the water,” he says. “I’m expanding my net a little bit. I definitely haven’t ruled anything out. I’m keeping an open mind about what and where.”