Building from the ground up in Florida is simultaneously one of the best plays and one of the most operationally demanding strategies in real estate. The upside: you create equity from nothing, get exactly the product the market wants, and can finance into permanent lending immediately post-CO. The downside: permits, codes, and insurance add complexity that catches out-of-state investors off guard.
Florida Wind Code Requirements
Florida Building Code (FBC) has some of the most stringent wind resistance requirements in the US, driven by hurricane exposure. Buildings must be designed for specific wind speeds depending on county and location relative to the coast. Impact-resistant windows, reinforced framing, and specific roofing systems are required. These requirements add cost (typically 5–15% above comparable construction in other states) but also produce more durable, insurable product.
Permitting Timelines
Permitting timelines vary dramatically by county. Miami-Dade is known for lengthy review periods — budget 6–12 months for complex projects. Broward and Palm Beach are faster for residential. Hillsborough and Pasco counties have invested in streamlined permitting for residential development. Factor permitting time into your construction loan draw schedule and interest reserve calculation.
Insurance During Construction
Builders risk insurance is required throughout construction. It's more expensive in Florida than most states. Budget $3,000–$8,000/year for a residential construction project. Once CO is issued, you need a landlord or homeowners policy in place before the construction loan can be converted to permanent financing.
Construction Loan to DSCR Refinance
The standard play: build using a private construction loan (draw-based, interest-only), complete the project and obtain CO, lease up the property, and immediately refinance into a DSCR loan. If you've built the project right and rents support the DSCR, you can often pull your construction equity out tax-deferred on the refi.
