Hurricane Ian’s wrath left tens of thousands of destroyed and flood-damaged homes in its wake. Many southwest Florida real estate professionals received calls from the surge of investment buyers that followed, looking to capitalize the moment exasperated homeowners facing daunting repairs threw their hands in the air and put their properties up for sale.
But for many of those opportunity buyers, the “quick flip” has been anything but fast. It is instead proving an often frustrating process of trying to find construction trades to do the renovation work, sourcing materials, and waiting on permits and inspections. In a business model where time is money, the delays can cost investors big.
“It’s an overwhelming challenge,” Associated Builders and Contractors Florida Gulf Coast President Steve Cona said. “It’s a perfect storm of the construction industry that was already facing a labor shortage and supply chain disruptions. The hurricane added to the challenges by dramatically increasing the need for construction services and materials.”
With Ian recovery expected to be a multi-year undertaking, there is no shortage of projects, just a growing shortage of construction workers. The construction labor shortage was dire prior to Ian, with the Department of Labor estimating in 2023 a need for more than a half-million additional construction laborers nationwide to meet housing and infrastructure needs. Flip investors unable to find help may be tempted to take on much of the work themselves, but storm damaged homes can be a challenge often beyond their scope of expertise. Water-damage presents issues with mold, electrical, and roof repairs, which generally require permits and licensed professionals.
Real estate investor and developer Jeanne Stosser has been in the housing industry for more than twenty-five years. She often has multiple Florida Golf Course Homes and Florida Waterfront Home renovations working at once, but has had to extend her timelines and cutback on the number of homes she takes on at one time. “Investors should not expect a quick turnaround at this time,” Stosser said. “ The biggest problem I’m having is in the permitting and delays to even get started on the renovations.”
In Lee County, hurricane damage repairs continue to take permitting priority and will for the foreseeable future. Experienced real estate professionals from The Waterfront Lifestyle Group can help to temper investor expectations by knowing the realistic timelines for permitting, and helping your investor/buyers to partner with a construction firm or contractors before the property even closes. Stosser employs this relationship-driven strategy not just post-Ian, but in all of her transactions. “I had contractor relationships before the storm and they were available to me after the storm. Still, we are limiting our purchases to three homes at any given time. There are product delays. The biggest issues we are seeing is in roofing, window, and drywall. The order and deliver times are unusually long.”
Cona echos her recommendations, noting that now more than ever investors need to call on established relationships to get the job done. “Although the construction industry continues to see labor and supply chain challenges it is important for investors to engage construction firms early on in the process,” recommends Cona. “ Implementing this strategy can mitigate the impact of these disruptions and continue to deliver profitable investments.”
Contact the real estate consultants at The Waterfront Lifestyle Group at 239-691-2487.
Main photo courtesy of Getty Images
