Investment product · Perozo Molina Group
Full rehab in Miami: tear down and rebuild on a street that already exists
You buy an old house in an established Miami-Dade neighbourhood, take it down almost entirely, and build a new one on the same lot. It is not a renovation — it is new construction on ground that already has a location, a street, schools and neighbours. That is why it sells at the price per square foot of new build, and not at the price of the house that was standing there.
How is this different from a fix and flip?
Both are buy, intervene, sell. The difference is how much of the house survives — and everything else follows from that: the timeline, the money you put in, and the neighbourhoods where it works at all.
| Fix and flip | Full rehab | |
|---|---|---|
| The house | Kept and improved. Sometimes a bedroom or bathroom is added | Taken down almost entirely; a new one goes up on the same lot |
| Timeline | Three to six months | About twelve months |
| Budget | Renovation-sized | New-construction-sized |
| Where it works | Central Florida, where land is cheap | Where land already has value: Miami-Dade |
| Where the value comes from | The renovation | The lot, plus a new product on top of it |
Where does it make sense, and how do we know?
Not in any neighbourhood. The land has to already be worth something, the street has to support the exit price, and the permits must not eat the year. These are the numbers we track every month for the three that come up most.
| Neighbourhood | Median $/sq ft, houses | All property types | Median house price | Days on market |
|---|---|---|---|---|
| South Miami | $977 | $714 | $1,772,284 | 105 |
| Pinecrest | $764 | $598 | $2,258,062 | 83 |
| Coral Gables | $888 | $661 | $2,005,925 | 90 |
Two more things about location that do not show up in a table. Coral Gables needs care: its historic districts and the Board of Architects add both time and cost, and on a twelve-month project the time is the expensive part. And a lower median in Pinecrest than in South Miami does not mean cheaper — Pinecrest has wide lots and larger houses, so the same dollar per square foot buys a bigger project.
What makes a house sell above $1,000 a square foot?
Between $900 and $1,150 there is a lot of distance, and a handful of decisions settle it — all of them taken on the plan, not at the end of the build.
| Design decision | Why it moves the price |
|---|---|
| 12 to 14 foot ceilings | Volume, and the sense of a premium product. It is what a buyer in this band expects |
| 10 to 12 foot sliding doors | Continuity between inside and outside — one of the strongest drivers of demand here |
| A covered outdoor terrace | Extends the perceived living area and adds real use in this climate |
| Transitional impact windows | Meet code, improve the insurance, and keep the look coherent |
| Natural stone or porcelain floors | The finish that is simply assumed at this price |
In order of how much they move the number: ceiling height, architecture, lot width, kitchen quality and the pool area. That is what separates a $900 house from an $1,100 one.
The arithmetic, in the order it happens
A 2,600 square foot house in South Miami. This is the mechanics, not a projection of your deal.
| Stage | Amount |
|---|---|
| 1 · You buy What the property costs. You are paying for the lot and the address: the house on it is going to disappear, so its condition barely enters the price | $890,000 |
| 2 · You demolish and build Demolition $35,000, construction $910,000, pool $70,000, and $30,000 of soft costs — permits, architect, inspections | $1,045,000 |
| 3 · The money and the sale $85,000 of interest on a $1,000,000 loan at 8.5% for twelve months, plus $143,000 of selling costs, which are 5.5% of the final price | $85,000 + $143,000 |
| Total cost, everything in | $2,163,000 |
| Sells for — 2,600 sq ft at $1,000 | $2,600,000 |
| Left over | $437,000 |
Of that $2,163,000, the bank puts in $1,000,000 and you put in $1,163,000. The return is measured on that — the money that actually leaves your account: $437,000 on $1,163,000 is 37.6% over twelve months.
At what price does it start to make money?
This is the figure to look at before the profit. Below it, the project does not return the money. $822 a square foot — a sale of $2,137,566.
| Price per sq ft | Sale | What is left |
|---|---|---|
| $822 | Break-even — $2,137,566 | $0 |
| $850 | $2,210,000 | $68,450 |
| $900 | $2,340,000 | $191,300 |
| $1,000 | $2,600,000 | $437,000 |
Questions people actually ask
The four that come up before anything else.
How long does a full rehab take? About twelve months, purchase to sale. Permits and municipal review are what move that most, which is why the neighbourhood matters as much as the house.
Is the whole house demolished? Almost. What is kept and what is not depends on each municipality’s code and on what helps the permit. What comes out is, for the purposes of the sale, new construction.
So what is the house bought for? In the example above, $890,000. That figure is the whole property, and what is being paid for is the lot and where it sits: because the existing house is coming down, its condition barely affects the price. Which is why a full rehab looks for old houses on good streets, not tidy houses on ordinary ones.
Why Miami-Dade and not Central Florida? Because here the lot already has value and that value is not lost when the house comes down. Where land is cheap it is more efficient to keep the house and improve it — which is exactly what the fix and flip does.
Perozo Molina Group · +1 689 680 1112 · WhatsApp +1 689 680 1112 · perozomolina.com
A real estate team at Miami New Realty, a licensed Florida real estate brokerage (licence CQ1020974), 2470 NW 102 PL Suite 107, Doral, FL 33172. This is an estimate, not a quote. The figures come from the sources named on the page this was printed from. Nothing here is tax or legal advice.