The Ultimate Flip on Hibiscus Island
A Brown Harris Stevens Realtor sold her client a home for $12.5 million. Little more than a year later, she suggested he turn it around for $3 million more
Now is the time to cash in on South Florida real estate investments, says Tara Baptiste, a Realtor with Brown Harris Stevens Miami: She recently helped one client earn a whopping $3.1 million profit from the sale of a home he purchased 14 months prior. “I’m seeing a lot of people buying and selling and taking advantage of the market,” she says. “It’s been crazy the last year.”
The 4,170-square-foot house, which Miami-based architect Choeff Levy Fischman designed on Miami Beach’s exclusive, manmade Hibiscus Island, has many desirable features, ranging from its modern-yet-neutral finishes to its seamless indoor/outdoor elements. When she saw the fully furnished five-bedroom, 5.5-bathroom home listed in 2021 for $12.5 million, Baptiste immediately pitched it to her client as a potential secondary residence. “The listing agent had already shown it several times that day,” she recalls. “I told him he’d have to make a full-price offer.” However, she adds, “I felt we got a great deal. It could’ve gone for more.”
The property is positioned enviably in a gated community, features a complete Crestron smart home system and boasts a heated saltwater pool and wading area. But Baptiste says the highlight of the home, built in 2017, is its location: “Waterfront is so hot. And very hard to come by. There’s no inventory. Typically, the homes with views need complete gut renovations, and a very small percentage of my clients want to renovate, especially now that the cost of building supplies has risen up exponentially.”
She talked to him again a few months later to say that she suspected he was sitting on a goldmine and should consider listing it. Lucky for that homeowner, he trusted his agent and took the leap. This success story illustrates just how extreme Miami’s real estate market has been in past decades and especially in recent months. For comparison’s sake and according to public records, whatever stood on that same lot sold for $3.6 million in 2014.
For those who’ve opined that the American real estate market peaked this summer, everything is relative, Baptiste says: “Within the last six months, it has kind of slowed down, but most markets are still going through the roof. I think it’s just starting to cool a tiny bit. I’m seeing some price decreases and things sitting a little longer. But South Florida will stay put. We’re not really affected by interest rates. And it’s still one of the most desirable places to live.” From March 2021 to March 2022, Miami-Dade County real estate posted its 10 highest total existing home sales months in history, according to the Miami Association of Realtors and the Multiple Listing Service system.
Baptiste has the following suggestions for buyers. First, the obvious: “Cash is king. Most sellers want cash offers.” This is true at nearly any price point nowadays. Sellers are also especially interested in quick closes, waivers of appraisal contingencies, short inspection periods and good chunks of money down for deposits before inspections.
And then she says something surprising and counterintuitive: Sellers do not necessarily need to refresh their properties: “Probably more than half of the ones I see need updates, especially in the kitchens and bathrooms. Any updates help, of course. Buyers like open concepts and bathrooms with more modern finishes. And if you can make it turn-key, it’s easier and better—especially nowadays when furniture and everything is on backorder.” But all that is background, Baptiste says. What buyers really want are the attributes that you can’t order up, fix up, or replace—”like water views.”
However, one question still looms: Even for those who sell their homes and score a big profit, can they afford a replacement abode? Baptiste says her wealthier clients are not sweating the market: “They say, ‘Let’s just find something bigger and better.’ ”