Walker Frank, Renter in Fort Lauderdale, FL

I am moving to Florida and planning on buying some investment properties. Which investment properties would be better for the current market?

Asked by Walker Frank, Fort Lauderdale, FL Sun Dec 23, 2012

I am looking at purchasing 3-4 investment condos to rent out, each less than 100K, or a multi-family with a similar number of units in the 400K-450K range. Which would be better right now? Long term? Please let me know what your opinions are! I am moving from California and am just looking for some advice about the market, I am not looking for a broker/agent at this time. Thank You

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19
Ed Hines’ answer
It would depend on what kind of out scenario you are looking for at the end. You can buy some condos that are easier to sell anytime but maybe don't have that much positive cash flow. You can buy low level single family homes that require management that are easier to sell and can have some cash flow. You can also buy a bigger multiunit building that will require management but you can make great money with positive cash flow but harder to sell at the end since an investor would be the only buyer. I found a 32 unit for 500,000 with a 15 percent cap. You need a agent that is an investor first like me that got his license to be around real estate but started as an investor. I owned a 10 plex and 4 plex, I have owned single family homes and condos. 10 plex great cash flow, single families easier to sell but more repairs since you have to own many. Condos are great for appreciation I live on waterfront condos that go as low as 122000. 2 brdm 1 bath that don't cash flow great as a rental but will be worth big money in the next 10 years since they are right on tampabay and many people want them from all over the world to rent and buy. Let me know if you want to deal with an investor thinker realtor you can email me at edhines@hotmail.com or call 727 512 0459
0 votes Thank Flag Link Wed Jan 23, 2013
IMO, cheapest doesn't necessarily mean best opportunity. Knowing your market will be HUGE in being able to make a wise business decision. Remember that there is one constant when dealing with real estate...LOCATION, LOCATION, LOCATION......
0 votes Thank Flag Link Wed Jan 23, 2013
Walter,

Your best bet for determining the most advantageous investment properties to purchase would be to choose a Realtor you trust and have a discussion with him or her about your situation and expectations.



Chad Gray PA, Realtor
Luxury Living Fort Lauderdale
Coldwell Banker Residential Real Estate
754-300-6040

100% of clients rated our service as "EXCELLENT"!
http://luxurylivingfortlauderdale.com/what-clients-are-saying/

.
0 votes Thank Flag Link Wed Jan 23, 2013
In general the advice offered regarding condos is correct. Having said that there are a few condo hotel buildings that allow you to 'self manage' with restrictions.

Bottom line is if you...

- understand numbers
- are a competent organiser/manager
- are service minded
- buy the right condo
- buy the right location
- pay the right price

then you should be able to make an attractive ROI. For example, if you're sharp and you know what you're looking at you can buy condo hotel units for between 175K-250K self manage, achieve 90% occupancy and earn 35K-45K per year after HOA, property tax and insurance. But you need to be on the ball and you will be nagged by permanent phone calls from interested clients.
0 votes Thank Flag Link Sun Jan 20, 2013
Many good answers here. But the most important part of owning investment properties is good Property Management.

I have managed residential income properties for over 15 years and obtain many of my clients after they have tried and failed at self-managing their own properties.

It is a full-time job that requires you be on top of things 100% of the time.

Randy Bultema
Licensed Property Manager
Metro Residential LLC
Fort Lauderdale, FL
954-816-7476
manager@metrofla.com
0 votes Thank Flag Link Sun Dec 30, 2012
When you think of Florida, you probably think of the big cities – like Miami, Ft. Lauderdale, West Palm Beach, Tampa, and Jacksonville. However, you just might see your property values skyrocket in another, smaller part of the state…
…Vero Beach. Business Insider has ranked Vero Beach 5th in country when it comes to five-year appreciation. Or, in other words, if you own a home here now, your home’s value will do some of the fastest climbing in the country by 2017. Just how much climbing are we talking? According to Business Insider’s projections, Vero Beach homeowners can expect their home values to go up 8.7% each year for the next five years. So, if your home is worth $100,000 today, it will be worth $143,500 by 2017. Vero Beach isn’t the only small Florida metro getting some love from Business Insider, though. They’ve also got Panama City and Ocala ranked in their top 10.
0 votes Thank Flag Link Thu Dec 27, 2012
If this is your first investment property I would consider a duplex. Number one is if you buy right you can have a 50% vacancy and pay all your expenses and still make a profit. Also for a first investment it is not too big and not too small. For long term pay attention to your location and condition. Depending on your budget and resources I recommend buying something you can build some value into. Kitchens and baths are always good to upgrade. Stay away from condos. Although they may seem like a good choice based on your initial figures there is usually a headache factor involved with condo and homeowners associations. Finally, don't be a slum lord. Take care of your property and your tenants. Good luck.
0 votes Thank Flag Link Wed Dec 26, 2012
Hi Frank,

My advice is to remove condo’s completely from you list of options. Condominium’s inherently present issues for the buy and hold investor. Many associations have strict policies when comes to renting your unit. Most would require that you occupied the unit for 1 year before renting, many have rental unit percentage caps which could force you to be place on a “rental” waiting list after your waiting period, and in my experience, boards can make the tenant approval process less than accommodating. Add these “loss of rent” factors to increased expense due to association fees, and condo’s become less attractive as long term, cash generating investments.

Please feel free to contact me. I am an Investor Certified Specialist and I have a FREE Investor Training Center, and Investor Tools for your use at http://danobrianrealtor.com/dan-obrian-realtor-investor-center/

Warm Regards,

Daniel OBrian, OICP

Henri Frank Group – Remax Preferred
2166 Wilton Drive
Wilton Manors, FL 33305
C: 754-244-1933
O: 954-604-9999
F: 888-586-8171
Email: Dan.OBrian.Realtor@hotmail.com
0 votes Thank Flag Link Wed Dec 26, 2012
I suggest looking at several condos, if you can find them, and checking the rent you are likely to receive versus the expenses you will difinitely pay: condo association monthly fee, taxes, repairs, liability insurance.

Then, look at a multi-family property that fits within the price range you have in mind. Your expenses will included taxes and insurance.

Then, compare the expected rate of return on the condos against the expected rate of return on the multifamily property.

If your condo is empty, there is no income on it. If you have a four-plex, for example, and you are lacking one tenant, you are still bringing in income.

Long term, you are probably best off with a multi-family property because you are able to calculate the expenses on a long term basis. With a condominium, you have no idea where the condo fees are likely to go. Usually, that direction is up. And if you purchase condos in distressed buildings where there are numerous foreclosures and short sales, that means large numbers of owners are not paying the condominium fees.

Those fees are necessary to cover the expenses of running and maintaining the condo. If you are an owner, you may find your assessments rising because someone has to pay the condo fees. Those who are committed to the condo are the most likely to continue payment because they know that if they don't the value of their investment will continue to fall.

Your multi-family property has fixed expenses: taxes, insurance, and reserve for repairs. Eventually, you will have to fix things, but if you maintain a steady reserve year after year knowing that that money will be needed over time, you are likely to make a profit on your investment.

If you purchase for cash, your cash on cash returns are likely to be lower, and you will lose the tax advangages of leverage. If your credit is sufficient, you may want to purchase using a mortgage -- typically you will need to put at least 30% down -- because your cash on cash return, in terms of percentage, is likely to be higher.

Marc Jablon, The Jablon Team
RE/MAX Complete Solutions
JablonTeam@gmail.com
561-213-6139
http://www.JablonTeam.com
0 votes Thank Flag Link Mon Dec 24, 2012
Walter,

All given answers below are right but because you are looking for "an investment" doesn't mean that all investments out there in SE Florida will necessary be good for you. There are too many variables to determine what would the perfect investment be for you.


Condos are not such great investments because of the tedious HOA with difficult renting restrictions and limitations. Single Family homes are better cause you set your own rules. However,
our present inventory in the under $125K market value in all SE Florida is pretty much depleted and what' left, most of them, need tons of work. A single multi-family investment at $400 - 425K may be a better choice.
0 votes Thank Flag Link Mon Dec 24, 2012
Hello,
I would love to help you find investment property here in South Florida as I get properties that are listed and properties that are not listed. I can help you find great investment properties as I work witg plenty of investors that deals with anything from apartment buildings, duplexes, and SFH with great cap rates.



I look forward to working with you and welcome to South Florida

Thank you,
Tamika Moses
Keller Williams Realty
954-404-4646
tmrealtor@yahoo.com
0 votes Thank Flag Link Mon Dec 24, 2012
In SW Florida rental demand is bigger than the inventory. 3/2 Single Homes located close to good Schools is a great investment!

Angelica Barbosa
Century 21 Birchwood, Inc
4040 Del Prado Blvd S
Cape Coral, FL 33904
Phone: 239-6289604
angelicabarbosa@c21birchwood.com
http://www.ontherockproperties.com
0 votes Thank Flag Link Mon Dec 24, 2012
I personally own numerous single homes rentals (since 1987)
As an investor, I will NEVER buy any property that has a HOA/Condo Assoc. which take an additional 4 weeks to screen my tenants, once I find a worthy one.....
Meir Aloni & Team

CRS (Certified Residential Specialist)

CDPE (Certified Distressed Property Expert)

RECS (Real Estate Cyberspace Society)

Successfully selling Broward County since 1986!

Direct phone# 954-338-5220 http://www.WeSellBroward.com

All Star Realty Inc.
0 votes Thank Flag Link Mon Dec 24, 2012
-
My advice as a Mortgage Broker and Investor is to stick with either single family free standing homes (3/2/2) of a separate townhomes in deferent locations.

Reasons:

1. appreciation

2. quality of clientele

3. ease of financing, at purchase and for potential buyers

4. PIA factor

Steve McRory
Pro Option Mortgage/ Florida
steve@pro-option.com
http://WWW.PRO-OPTION.COM
Ph: 888 662 4404

Prior Service U.S. Marine Corps

===
0 votes Thank Flag Link Mon Dec 24, 2012
Several 'heavy hitter' investors (such as Blackstone) are also purchasing in Fl. They, however, have determined to purchase SFH. What is BEST clearly depends on the 'end game,' risk aversion or revenue goals, not the type of property.

Missing this critical data, what you are proposing can be the classic presentation of invalid choices. So, I flipped a coin - multi-family wins.
0 votes Thank Flag Link Mon Dec 24, 2012
Look at and carefully consider the numbers prior to making any offer. Taxes, HOA fees, insurance, and supportive services can add up quickly and put a damper on your plans. Of course these numbers will vary from one complex to another.

You've likely heard the expression, "location, location, location...." This doesn't change when considering investment property. We also always recommend that when buying, buyers consider the resale potential for the subject property. You may not be considering selling now but this too could change. Thus your decision should include more than price and opportunity.

We understand that you are not in need of an agent at this time but in an effort to protect your best interests, sooner would be better than later.

Good luck,

Bill
0 votes Thank Flag Link Mon Dec 24, 2012
Hi , There might be overall higher ROI in 2 single family pool houses in top school districts at $250k each . I recommend your teaming up with an experienced Realtor. See all listings at http://www.buy-sell-rent-florida.com
Julie Rosenthal (561)827-6789
Julier6789@gmail.com
Property Brokers International
Jupiter Florida
0 votes Thank Flag Link Mon Dec 24, 2012
Hi,

I work with several investors such as yourself. You may find that investing in multi-family properties would give you the greatest leeway on who you can rent to, and give you the opportunity to rent multiple times should you find that your tenant is not paying their rent on time.

You will also not have to worry about condo or homeowner fees. Your cost will be limited to propert taxes, electricity, and water for the common areas.

If you would like more information you contact me directly at:
Nadine Mauro
Highlight Realty
561-414-0864
NadineSellsHouses@gmail.com
0 votes Thank Flag Link Sun Dec 23, 2012
4-plex, but only if you were a seasoned investor - but if if you were, you wouldn't have been asking :) Like with anything else, to tell you what is best FOR YOU, one has to know YOU :) Good luck
0 votes Thank Flag Link Sun Dec 23, 2012
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