Why Billionaires are Quietly Moving to Florida ⎜Jay Roberts

Core thesis

Florida (Miami / South Florida) is aggressively pro-development and attracting high-net-worth migration (tech founders, entertainment, investors). That migration creates demand-driven appreciation—especially for scarce waterfront product—making Miami an attractive market for luxury condo and hotel developers.

Company focus

Prosper Group (CEO Jay Roberts) builds luxury waterfront condos and boutique hotels targeting high-end buyers (many cash buyers). They use pre-sales and partnership/capital structures to de-risk projects and scale large developments.

Frameworks, processes, and playbooks

Development underwriting model (stepwise)

1. Land acquisition price → determine allowable build program (zoning/height/setbacks) → calculate sellable square footage (units × average sqft).

2. Costs:

   • Land basis
   • Hard construction cost (per sellable sqft)
   • Soft costs
   • Financing costs Sum = all-in development basis.

3. Revenue:

   • Sellable sqft × market sale price per sqft (or unit price × units) = sellout revenue.
4. Profit:
   • Profit = sellout revenue − all-in basis → derive margin and IRR.

Pre-sale / pre-development funding playbook

• Pre-sell units prior to construction. Typical deposit structure: 40% total (20% at signing, 10% at groundbreaking, 10% at top-off).
• Use up to 40% of deposits toward construction (10% can be bonded), effectively reducing required sponsor equity.

Due diligence checklist / entitlement sequence

• Land-use attorney + broker → zoning confirmation (height, units, sqft).
• Architect to design to zoning constraints and produce program.
• Third-party consultants: engineers, geotech, soils, surveys, entitlement consultants.
• Cost and revenue underwriting, capital stack planning, timeline assessment, risk analysis.

Partnering model

• Bring development partners with complementary strengths (local entitlement experience, long track records) and split value creation.

Sales and amenity strategy

• Product differentiation: waterfront focus, wellness amenities, white-glove services to out-position competing supply.
• Amenity playbook examples: fitness, pools, spas, pickleball/paddle/tennis, butler/concierge, yacht charters.

Key metrics, KPIs, targets, timelines (development example)

• Land purchase: $30,000,000 (North Bay Village waterfront site)
• Program: 150 units × 2,000 sqft average = 300,000 sellable sqft
• Zoning/height: ~340 feet (~30 stories)
• Land basis per sellable sqft: ~$100/sqft
• Hard construction cost: ~$600/sqft → ~$180,000,000
• Soft costs: ~$90,000,000
• Financing costs: ~$45,000,000
• All‑in cost basis: ~$345,000,000
• Revenue assumptions: $1,500/sqft sellable → $450,000,000 sellout (≈ $3,000,000 per 2,000 sqft unit)
• Profit: ≈ $105,000,000 → ~30% margin on this example
• Pre-sale deposit: 40% (≈ $1.2M on a $3M unit); many buyers pay cash; some finance post-delivery
• Entitlement timelines:
  • Miami ≈ 12 months
  • California (San Diego/LA) ≈ 3+ years
• Typical acquisition financing: ~50% loan-to-cost for pre-development/acquisition loans
• Project horizon: typical development cycle 5–6 years; target cadence = 1–2 new large developments per year
• Recent performance: Prosper/partners sold ≈ $200M in Tampa product in the last year; plan to close construction loan and break ground within ~6 months after hitting ~50% presales
• HOA cost range: $1.00–$2.50 per sqft monthly; ultra-luxury buildings around $2/sqft (e.g., $4,000/month on a 2,000 sqft condo)
• Miami market trend: condo prices reportedly increased 14 consecutive years; median home price progression (selected years):
  • 2010: $190K
  • 2021: $500K
  • 2023 (peak): ~$610K
  • 2026: ~$570K
• Population projection: Florida expected to add >5 million people from 2025–2050 (University of Virginia projection)

Concrete examples and anecdotes

• North Bay Village development: detailed underwriting example above—demonstrates math from land → costs → revenue → margin and shows use of presales to fund construction.
• Venetian Islands house: bought for $7M (2019) → flipped to $13M → listed/sold near $25–30M by 2024 — illustrates waterfront scarcity and rapid appreciation post-2020.
• Tampa pipeline: ≈ $200M sold in the last year, breaking ground after financing and 50% pre-sales.
• Amenity impact: adding a pickleball court to an Airbnb villa in Scottsdale increased revenue by ~30% overnight—example of a simple amenity raising ARPA/RevPAR.

Actionable recommendations / tactics

• Target scarce, irreplaceable locations (waterfront) to reduce direct supply competition and capture stronger appreciation and lower cap rates.
• Underwrite conservatively; model hard/soft/financing per sellable sqft and stress-test for time and interest-rate risk.
• Use pre-sales aggressively: structure deposits to both show demand and finance early construction (reduces sponsor equity needs).
• Assemble strong partners with complementary capabilities (local entitlement experience, capital, construction pedigree).
• Prioritize product differentiation (wellness, white‑glove services, unique amenities) to command pricing premiums and attract high-net-worth buyers.
• Favor markets with predictable entitlement timelines where possible (Miami advantage).
• Monitor macro tailwinds: population growth, wealth migration, tax policy, international buyer flows.
• Account for insurance / flood / hurricane risk in underwriting—higher premiums or self-insurance can materially impact NOI and capex modeling.

Risks called out

• Time to delivery / entitlement duration and regulatory changes—time is the biggest risk.
• Interest rate changes that increase financing costs and reduce buyer demand.
• Supply increases due to relatively low barriers to entry in Florida → need superior programming to outcompete.
• Concentration of international buyers: geopolitical/economic events abroad can affect demand.
• Insurance cost spikes, flood and hurricane risk; owner self-insurance is risky and can distort comparables.
• Market segmentation/bifurcation between new high-end product and older condos (older assets may become less desirable, especially after events like the Champlain Towers collapse).

Tax and capital considerations

• Florida tax advantages: no state income tax; state finances rely on sales, ad valorem, and hospitality taxes with generally lower per-capita budgets.
• 100% bonus depreciation (“Big Beautiful Bill”) can create significant first-year tax shields for chartered yachts/jets/heavy equipment if structured properly (example: a $35M yacht could generate sizable theoretical tax savings at a high marginal bracket). Emphasizes interplay of tax policy and ultra-high-net-worth investment decisions.

Operational and organizational notes

• Keep core relationships on-call: land-use attorneys, architects, general contractors, engineers, geotechnical consultants, brokers.
• Track KPIs and growth metrics; invest in team and expertise—“overpay for excellence” and leverage the power of proximity.
• Capital stack discipline: target ~50% acquisition LTV and require sufficient pre-sales before closing construction loans.

Presenters and sources

• Jay Roberts — CEO, Prosper Group (primary interviewee)
• Rich — podcast host / interviewer