While multifamily properties may be hard to come by these days, says Weaver, once investors are able to purchase them, they can still get attractive debt through Freddie Mac and Fannie Mae, with loan-to- values as high as 75% in some cases.

Much of the shadow inventory created by new condominium projects has already had its effect, says Weaver, so it is causing less disruption in the rental market than it once it. Plus, some condominium renters are even moving back to traditional apartment buildings because they offer a more stable living environment, he says. In a condominium, the rental income that an owner receives is often not enough to prevent foreclosure.

Cap rates for well-located properties are down 50 plus basis points from their peak in the first half of 2009, says Weaver. "Borrowing 75% at a 5.5% interest (rate) on a 7 cap rate deal, would provide a buyer cash-on-cash returns of 7.5% with a 30-year amortization and 11.5% with interest only," he says. These kinds of returns compensate investors who are waiting for their properties to appreciate, says Weaver.

Limited supplies of desirable multifamily properties are a boon to investors, says Weaver. "The number of pure apartment building units in South Florida is still 12% under the peak seen in second quarter 2003, because of condo conversions," he says.

New construction has come to a virtual stop in South Florida, where less than 3000 apartments are under construction. One of the few developments under construction is the Alexan in Plantation with 481 units.

"With current rents in most South Florida submarkets below replacement costs, it could be several years before new construction begins. Even if new development starts earlier, years of supply constraints will have profound, positive effect on rents," says Weaver.