Waterfront Wonderland, 50% Off Sale
By Tom Dyson
August 27, 2007
Steve called it a "tear-down"...
"You could use this house for a couple of years as a vacation home," he explained. "Then you'd tear it down and build a new house when you come down here to retire."
Last Thursday afternoon, I drove across the bridge from Fort Myers to Cape Coral to meet Steve Koffman. Steve is a realtor with Century 21. He showed me around Cape Coral for a couple of hours...
"Two years ago, this house would have listed between $650,000 and $700,000," said Steve. "It's on the market for $299,000 today."
The house was built in 1962, but it was in good condition. It has two bedrooms, two bathrooms, and a screened-in swimming pool. Total square footage: 1,350.
"I'd be comfortable here," I told Steve. "There'd be no need to tear this house down."
"Well, that's up to you. But you don't buy this property for the structure. You buy it for the location..."
Cape Coral is an extraordinary place. They call it "Waterfront Wonderland." I'm not a fisherman, and I don't own a boat. But if I did, I'd live in Cape Coral. The whole city is a patchwork of canals. Some of them are saltwater. Some are freshwater. But basically, you can sail into the Gulf of Mexico – and to all the beaches up and down the coast – from almost any point in town.
"Venice only has 100 miles of canals," said Steve. "We have 400 miles."
This house had its own dock and boat crane. In five minutes, you could be at the marina, the beach, or fishing in the Gulf of Mexico. You could also take a beer down to your dock and fish right there.
"This is truly a very pleasant place to live," said Steve. "And we know the baby boomers like this lifestyle. We've got great restaurants, shopping, and the airport is only 12 miles away."
Steve is Century 21's No. 1-ranked broker in Florida for three years running... and one of the top brokers in the nation. Since 2004, his team has done $300 million in real estate deals...
"There are absolutely amazing deals right now," he said. "We will never see these deals again in our lifetimes."
I asked Steve about the correct strategy for investing in property in Cape Coral.
"The best bargains are in raw land," he replied. "A vacant lot with freshwater access would have sold for $80,000 a couple of years ago. I just sold one for $18,500.
"Tear-down houses on the water are the second-best values. They used to sell for over $700,000. Now you'll find them below $300,000. Two years ago, waterfront lots, high-rise condos – you know, the high-end stuff – were our best-selling properties... the sort of places investors and out-of-towners buy. But now, you want to buy the houses that people who work for a living here can afford – houses in the $200,000 range. Those houses are selling best."
Steve says the market topped in August 2005. Since then, property prices have fallen between 1.5% and 2% per month. "Do the math," says Steve. "That's how we're down about 50% from the top..."
Good investing,
Tom
P.S. If you'd like to learn more about the property market in Cape Coral, you should have a conversation with Steve Koffman. He's the top realtor in Cape Coral, and he knows the market better than anyone. He'll be very happy to answer all your questions. His e-mail is steve@koffman.com.
P.P.S. If you'd like just a bit more leverage with sellers, take a trick from Andy in Detroit and show them some clips of these horrible news articles on Florida real estate. Here are some to get you started.
Editor's note: Tom Dyson is a regular contributor to DailyWealth, a free investment newsletter focused on the world's best contrarian opportunities. We write with a simple belief in mind: You don't have to take big risks to make big money with your investments.
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