Invest: Miami speaks with Jose Parrilla, CEO & president of InvestQuest Partners
What were InvestQuest Partner’s most important successes and milestones for 2016?
We achieved many important milestones in 2016. From the business standpoint, we were able to open an important number of developments. Our primary business is buying, renovating and flipping assets. We wiped out over $10 million in liens held by the local municipalities and completed over 200 flips. Our success this year has allowed us to grow the company to 300 employees.
With the deceleration of real estate growth, what is the expected impact on real estate investment in 2017?
The current slowdown in the market is a temporary one. We strongly believe that Miami will continue on a path of long-term growth because of its history of continually attracting affluent investors. We are confident that in a two-year period we will be able to sell our new projects at similar or higher prices to the ones today. Even when you take into account that, for Latin American investors, it has become more expensive to invest in the U.S. due to the strengthening USD and that the proportion of foreign money in the market has decreased in the last few years, there have still been an increase in foreign investors with significant presence, such as those coming from Spain and Canada.
What has been the performance of the REO vs the short sale market?
The Real Estate Owned (REO) market has completely dried up. According to our data, which is very conservative, there are people in that market segment who are overpaying for properties. This might be related to some speculation in the market, with many players assuming that the market is slowly going to increase. However, our data suggests that we should be preparing for a slight downturn.
The opposite situation is happening in the short sale market. It is an important opportunity in Miami because it not only gives players a chance to help people by taking them out of a difficult situation offering “cash for keys,” but it also is the most lucrative investment in real estate because of its many revenue sources: commissions from the banks, commissions from the mortgage holder, and the property at a huge discount.
How can investors take advantage of the zoning in Miami?
The optimum zoning we are currently focused on is T6-80, which allows the developer to build up to 12 stories with a density of 150 units per acre. One of the main challenges for developers that are trying to build under Miami21 is compliance with the parking spaces that are required in order to be allowed to build the units. However, since one of our projects is near the border between Downtown and Brickell, we received the first permission to build our units without the required parking spaces. This shows that the city is evolving and adapting to a structure better suited for high population density.
To learn more about Invest Quest partners, visit their website at: http://investquestpartners.com/