# Buying property in Florida



## geewilickers

Three years ago I bought a Toronto condo on paper, that was going to be constructed by today but they kept extending and now they are unable to finance the project so I had my lawyer get my deposit + interest back. The condo was for 210k and my down payment and initial deposit added to about 35%. With my saving and with my money back I now have around 100k to invest on real estate. 

Right now properties in Florida are very cheap and some in great locations surrounded by golf courses and tennis courts and 30 minutes from the beach. They go for $50,000 and $60,000 so I could buy one and with the remainder, lets say $40,000 I have left over invest in a Toronto property. Then I could spend 6 months in Toronto and another 6 months in Florida.

I was wondering if any Canadians here own property in Florida. What are your experiences?

ps> The reason the property is that cheap is because it's bank owned and you have to pay 100% downpayment and therefore it only attracts buyers who can afford it.

Thanks!


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## FrugalTrader

Check out this thread: http://canadianmoneyforum.com/showthread.php?t=34 or my article on buying property in Florida.


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## homeinboca

I bought a property in South Florida 6 years ago, so I got in before all the madness. I bought a really nice 2 bedroom, 2 bath, 1100 sq ft condo on a lake in a gated community around 20 minutes from the beach and surrounded by golf courses. 

I paid only $66,000 and it probably tripled in price during the boom and now is back to what I paid for it. I put 20% down and financed the rest at 5.6% fixed for 25 years with a Bank of America mortgage. 

It's been the most enjoyable purchase I have made. I am not ready for retirement, but use it several times a year including extended time in the winter. I plan to spend Oct - March when I retire in 8 years. 

We haven't rented it out, but family has been using it regularly, including the kids with friends. I have had a very positive experience with the purchase and think the timing is perfect now, but financing from a US institution may be tough.


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## Maltese

A vacation condo in Florida for $66,000 intrigues me and sent me on an internet search of properties in south Florida. I couldn't find anything that affordable with the amnemities you described. You place sure sounds nice and certainly affordable.


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## homeinboca

Maltese, there are lots of available properties at this price range and even lower - try using realtor.com - all you need to do is type your price range, desired size of condo and zip codes where you want to live.


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## purplesnow

homeinboca said:


> I bought a property in South Florida 6 years ago, so I got in before all the madness. I bought a really nice 2 bedroom, 2 bath, 1100 sq ft condo on a lake in a gated community around 20 minutes from the beach and surrounded by golf courses.
> 
> I paid only $66,000 and it probably tripled in price during the boom and now is back to what I paid for it. I put 20% down and financed the rest at 5.6% fixed for 25 years with a Bank of America mortgage.
> 
> It's been the most enjoyable purchase I have made. I am not ready for retirement, but use it several times a year including extended time in the winter. I plan to spend Oct - March when I retire in 8 years.
> 
> We haven't rented it out, but family has been using it regularly, including the kids with friends. I have had a very positive experience with the purchase and think the timing is perfect now, but financing from a US institution may be tough.


Wow, that sounds really GOOD! Just wondering, how is the property tax? I heard that Florida charge different tax (much higher) for non-state residents. What are other costs per month other than your mortgage?


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## canadianbanks

You are planning to invest the remainder of the money in Toronto property, right now when the prices are close to the top and are poised for a serious crash??


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## homeinboca

Purplesnow - yes there is a difference for Florida residents, called a homestead exemption. For long term home owners it means property taxes can be as low as $500 year. As valuations went through the roof, my property taxes went up, but now that are back down to $1,200. 
I think prices will be pretty stable for some time so I'm hoping that taxes don't rise signficantly.


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## baigarman36

The US is the most popular country after Spain for British people buying second homes abroad, and the majority of them buy in Florida.

Some watchers are predicting that the fall in Florida property is almost at an end, and prices have nearly 'bottomed out', so for people buying now it could be the perfect time for an investment.


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## Spidey

Just watched an interesting segment on "The National". Apparently the ownership status of many who purchased foreclosure properties is in limbo. This is because due to the massive volume, property foreclosures were virtually rubber stamped without giving the original homeowner ample time to present a case.

Somewhat unrelated, but I found it a little sad after seeing one of the foreclosure homes that was abandoned. Wherever the family moved to, obviously didn't have room for many of their possessions. The kids rooms still had furniture and many of their toys left scattered over the floor. I suppose that sometimes adults make mistakes where they must live with the consequences, but it's too bad that little children are also forced to deal with consequences that they had no part in.

Anyway, after watching the segment, I think if I was buying a Florida property I would pay a little bit more and buy an non foreclosed one.


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## kcowan

Spidey said:


> Anyway, after watching the segment, I think if I was buying a Florida property I would pay a little bit more and buy an non foreclosed one.


There have been documented cases of people owning their homes outright getting them foreclosed. I think you would be wise to wait a few years until all this mess gets sorted out.


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## Berubeland

One couple went to an auction and bought the second mortgage thinking it was the first one. They paid close to $240K and thought it was a decent deal for the house, they were foreclosed upon by the first mortgage holder a few months later. 

I do have a friend who bought a Florida house for 50K and she's happy she got a great deal 

Basically buyer be wary.


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## Four Pillars

Berubeland said:


> One couple went to an auction and *bought the second mortgage thinking it was the first one*. They paid close to $240K and thought it was a decent deal for the house, they were foreclosed upon by the first mortgage holder a few months later.
> 
> I do have a friend who bought a Florida house for 50K and she's happy she got a great deal
> 
> Basically buyer be wary.


Shouldn't their lawyer have caught this?


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## Berubeland

There is no lawyer that closes the deal at the auction...

You make your bid and pay the money and own the stuff ;(


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## HaroldCrump

Four Pillars said:


> Shouldn't their lawyer have caught this?


That's what the hundreds of thousands of home buyers are asking, the ones that bought foreclosed houses.
It slipped through several layers - the lawyers, the title insurer, the bank....


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## Rox

This thing about buying auctioned houses happens everywhere around the world, even in developed economies. The purchaser attends the auction by invitation, has never seen the house, don't know much about it except some small things they heard during the auction, then jump into the boat and quickly snap it up due to the great price.

Then later, they discovered that the ownership cannot be transferred legally due to many problems, eg utility bills not paid; in under-developed economies, we have squatters sitting inside the house; problems with the title at the Land Office due to special rights of certain races or ethnicities; frauds whereby the titles are under another mortgage bank, the list goes on and on,... 

I always stay away from house, commercial property,.. etc auctions. Though I don't mind art auctions, but I have a lawyer at the auction with me to check out on the authenticity and whether there is another owner registered against the artpiece that I am interested in.

Thought I'd just give-in my two cents here,...


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## sags

The banks and Wall Street were shuffling properties around so fast, they didn't want to the bother of having to go the local land registry office and fill out the paperwork.

So, they formed their own company called Mortgage Electronic Registration or MERS. This company simply recorded changes in ownership electronically, without any accompanying paperwork such as title and notes. The paperwork got lost or destroyed and the only record is from MERS.

The problem is that a lot of States don't recognize electronic registration and MERS is not owner or lender of the property, and therefore have no right to foreclose. The paperwork is gone, and everything is in limbo.

There is also the issue of avoiding land transfer fees to the local municipality by doing it within their own company.

I wouldn't buy any property in the US until they get it sorted out, because you have no idea if you own it.........and nobody can find out if you do, including a lawyer.


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## Spidey

One nice solution, is to rent rather than buy. We were there in the summer and the deals were unbelievable. I'm sure there are even better deals in the winter. Granted, you don't have the potential for future huge property increases but you also don't place significant amounts of money at risk. Besides most people I know don't really purchase as an investment per se, but rather as lifestyle choice. They often have no intention of selling. Why not just rent and have the flexibility to go to a different location from time to time?


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## Rox

"Why not just rent and have the flexibility to go to a different location from time to time?" 

Fully-agreed with the above statement,... and no need to pay property taxes too.


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## the-royal-mail

Spidey said:


> Why not just rent and have the flexibility to go to a different location from time to time?


I completely agree with this. As the economy continues to sputter and unemployment lengths increase, more and more people will come to this conclusion. I've owned and rented and the latter is a far better deal. Just pocket and save the savings, make that money work for you right away instead of giving it away to middlemen and risk crappy neighbors moving in who could lower your property value.

I also agree with your earlier post - I saw that same segment about the mess of sold and foreclosed US properties. The various entities were WAY too hasty about this and it is slowly being sorted out. One Judge had even been pulled out of retirement and briefly spoke to the TV cameras about the problem. 

Watch that documentary or story whatever.


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## Cal

Curious to know if the Florida 2nd home owners drive back an forth, or if you fly and leave a second auto at your Florida home?


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## Munns

I'm watching this thread with great interest. I've been looking at listings and there seems to be a lot on the market right now within range of what an earlier poster mentioned (2Bed/2Bath 1100 Sq ft for $60K).

I am still unclear on operating costs: non-resident property tax and HOA fees. Can anyone comment?

My uncle has owned a condo in the Ft Lauderdale area for 30 years and what he has experienced is a major decline in the quality of the neighbourhood. This aspect makes me skeptical, but the great exchange rate and rock bottom prices make me think this might be the right time to jump on board.

Any others out there?


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## Ihatetaxes

I'm in Florida right now and renting a beautiful house with a pool and spa in a gated community. The rental cost is so cheap for a house of this quality that we are paying about the same as staying at the Holiday Inn! We are thinking of buying down here and just renting it out occassionally to close freinds and family, maybe 8-10 weeks per year (enough to cover taxes and utilities). I can definitely see retiring 4-6 months a year down here. Love the weather, beaches, etc. And a huge bottle of good rum is $20. 

Forgot to mention the houses in this neighbourhood are listed in the $400-450k range but were selling 5 years ago for $800+. I wonder how many years until they are back up to that price? 10, 15 years? Maybe more.


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## HaroldCrump

Ihatetaxes said:


> Forgot to mention the houses in this neighbourhood are listed in the $400-450k range but were selling 5 years ago for $800+. I wonder how many years until they are back up to that price? 10, 15 years? Maybe more.


Not everything recovers back to bubble values. Ever.
Look at some of the dot coms still left over from the 2000 days like Yahoo.
It's been 11 years since the peak.
Will they ever recover their bubble valuation?
I doubt.


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## Cal

As an aside....and not that it is the greatest investment idea ever but I have heard that time shares are dirt cheap in FLA and AZ as well.


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## the-royal-mail

Be very careful folks. A lot of people make the mistake of assuming that because it's on Florida, it must be a deal. Not so. Before spending a cent, hop a plane and go and see the place for yourself. Nice communities like Naples (as an example) were expensive before 2008 and are still expensive. Quality.


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## HaroldCrump

Good point, TRM.
I'm rather familiar with Florida, having lived there for a while.
Real estate investors should keep in mind that Florida is not all sun, beaches and bikini-clad blondes.
A large part of the state is economically unviable, with no industries, no jobs and no real growth.
There are towns and cities in the heartland that were dumps a few years ago but because of the real estate boom now have fancy houses and condos.
But underneath there is still mosquito-infested swamps.
Unless some wave brings industry and economic activity to those parts of Florida, investing in real estate there is going to be a graveyard for decades to come.


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## Munns

I would be interested mostly for personal and family use, and eventual retirement (20ish years down the road). 

For those of you more familiar with FL, which areas would you think might be worth looking into with this in mind? I lived in Broward County briefly some years back and was looking at listings in those areas.

Not looking to turn a big profit, but looking at getting 'a deal' in terms of current market conditions and exchange rate.


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## kcowan

Munns
I think you need to narrow it down. There are at least four different Floridas that are very different. You need to decide on lifestyle before checking realty.

We had one local tell us that Ft Lauderdale is filled with retirees but that *their parents* live on the Gulf Coast! Panhandle people tend to be poorer retirees who are there for the deal.

Sarasota is populated by upscale lifestyles, as is Naples. But Naples is very controlled when compared to Siesta Key, for example.

Key West is almost a Caribbean Island experience, etc. If you cannot find a place you like in Florida, then it is because of you, not Florida.


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## Munns

I was looking at communities in Broward, specifically Tamarac, Weston, Coral Springs.

I am reluctant to speak to any realtors until I have a better handle on whether I want to do this or not, which is why I am curious to hear from others who know the area well and/or have purchased FL property themselves.

Thanks


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## WWanderer

Searching currently for information like this. We have chosen an area on the gulf side of Florida (we just spent a few days there.) We are going back in February with the intention of making an offer if we can find the right property.

Looking at $50K-$80K, 2x2 condo with good walkability, near the gulf. We saw some decent properties that meet this criteria, especially in 55+ complexes.

I'm now studying tax implications. Have been advised that we should set up a corporation to make the purchase, to avoid capital gains/probate later on. I also read something about a non-revocable trust of some kind. Not sure all this is worth it for a small purchase like this, but I'm exploring all options right now.

Our realtor has told us that we don't need a lawyer to actually execute the title, that in Florida realtors are bound by Florida laws to take on that part of the task themselves. Lawyers or tax accountants are need to set up trusts or corps, of course.

Anyone have experience with any of this? To make it more complicated, my husband is a dual citizen, US/Canada and has been told his name should under no circumstances go on the deed.


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