The Florida market is as hot as its weather, with off-plan sales at an all-time high and Brits looking for a piece of the pie

But Florida developers are mega in size, mega in money and have enough land to develop and sell well into the year 2010. So, how can an investor get a stake in the action? 

Budding developers can tread one of two paths in Florida. The first is a straightforward land buy and develop; the second is a joint venture in which an individual with capital of £200,000 - £300,000 teams up with a landowner and together they develop and sell.

The process of simply buying land as cheaply as possible, then selling the intended units usually fails to work.
A location must first meet several key criteria if it is to be developed successfully. It must be:

• Within a 15 to 20-minute drive to major attractions, beaches, shopping complexes or theme park.

• Sited in an area where there is a market for foreign visitors - look on them as would-be buyers - or where steady local demand will fuel the development. At the risk of stating the obvious, buyers will purchase the units but a good pool of renters will help sell the buyers.

• Located on a sized lot that can achieve planning for more then one unit: ideally between three and ten units depending on the build mix of villas, townhouses or condos.

The process of simply buying land as cheaply as possible, then selling the intended units usually fails to work

Land is cheap in the undesirable areas and fairly expensive in those that are good for sales. The drag on funds can be overcome, however, by financing the land purchase and getting planning, drawings and builders lined up.
Once these are in order, the properties are ready to sell off plan and the deposits there to be collected. The standard procedure is to ask for 20 percent on contract and the remainder on completion.

If the builders can work to these percentages, then the project has the green light. If they cannot, buyers will have to make staged payments. US lenders can offer a mortgage for US citizens to pay in this way but this route is closed to foreign nationals. 

Once a full round of buy, sell and build is completed, the budding developer will possess both a better knowledge and the funds to do it again on a bigger scale in the same area or in an up-and-coming one.

The second method of developing in Florida is a joint venture with a landowner who cannot afford to develop on their own. The landowner places the land in the pot while the investor commits £200,000 to the project.

This is not submitted all at once but drip fed into the project as it goes from company formation and registration, application for planning and drawings and finally off-plan selling.

The benefits of this method are the availability of land in better sales and growth areas, the time saved by not having to purchase and finance the land and the shared risk of the business.

The rules are the same as the first option but the addition of a very strong contract will be eeded for the new relationship. It is unwise to scrimp on the costs of a lawyer. The best will always give you the best advice.