Denver, CO · Member since 2016 · 28 posts · 10 votes
Hey guys! Long story short I have around 400k to invest in rental properties in south Florida. I have read the Fort Lauderdale market still has good returns if you find the right deals. I bought a MFH in January that has good cash flow and also am in he process of closing on a 3 unit MFH as well. My main goal here is to eventually live off of the income and have at least 20 doors.
I guess my main question is how should I plan to do this. Should I buy all MFH under 4 units or try other routes? My girlfriend is a RE agent which helps with the closing costs and is pretty knowledgable. I feel like I am buying high right now... But don't want to sit on the sidelines as interest rates are still low and cash on cash is over 10%. Any thoughts?
If you enjoy buying and managing 3-4 unit properties, I would suggest getting extremely knowledgeable about the multifamily deals that fit that criteria in your area. With that knowledge you will be able to develop great relationships and insights about the market to acquire the best deals. There are multitude of avenues you could take to hit your goal, so choose the one you feel the most comfortable with and be the expert in your market.
Good luck!
Hi Charles , congrats on moving toward your path of passive income investment. I would think you should explore joint venturing with other investors on larger projects, our family has done this successfully for years! this would substantially leverage your reach. Check out larger multi family , corporate housing and/or senior care..just my opinion! Ha happy investing!!
Charles, have you considered being a private lender?
In this market the only thing we're doing is flips. 7 transactions 4 more under contract in the past 3 months alone. I wouldn't buy any multi family personally unless it was 2M or up. It's just not worth the hassle.
We use private money for all of our deals, and IMO it's the best "passive" position to be in if you find the right investor.
If you enjoy buying and managing 3-4 unit properties, I would suggest getting extremely knowledgeable about the multifamily deals that fit that criteria in your area. With that knowledge you will be able to develop great relationships and insights about the market to acquire the best deals. There are multitude of avenues you could take to hit your goal, so choose the one you feel the most comfortable with and be the expert in your market.
Good luck!
I would suggest listening to the Lifestyles Unlimited Podcast. If you like them, I would sign up as a preferred investor and take their education courses on multi-family. They're one of the top real estate investment education groups in the country.
Tom Myers I have not looked into private lending as I would like to build equity but if the numbers are right. Do most loans do points? What are returns range? Length? Also interested in why you aren't a fan of MFH in the area... I understand they are not that easy to find ATM.
Ryan Cox We are trying to master an area but inventory on good deals seems low where we started so we are branching out a bit now.
I jumped from (1) SFR to a 6-plex using a 1031 and a commercial loan. The results are in my profile. I held a long time and intended to exit with the Family Trust, but this Spring was the right time to limit my efforts. My initial investment was just under 100k and your 400 can easily replicate the experiences IF YOU CHOOSE WELL.
@Charles Wang It really depends on what your goals are.. But the money you will make from private money lending will be much greater and faster than any amount of equity it would take you to build in 4 plex..
For example in the past 7 deals we have netted over 300k... and our private money lenders have made over 35k from us... All of that is in a 5 month time span.. You will not see those numbers in any 4 plex...
Also if you want to find good deals on multi family you will need to be doing lot's of marketing.. The chances of finding anything on the MLS remotely decent is -.001%...
To me, the little extra work in private lending, which is not much... will pay you 10x the amount you can make buying 4 plex that will just be a big hassle..
If you have bigger goals the only way to do MF is to invest in Larger properties either by your self or go in on the deal with somebody else.. where you can be making a 8-10% return passively plus if you find the right person they should REFI 3-5 years pulling most of your money out... AND you will be 100% hands off... Just a higher level approach and it will make your life so much easier.
@Charles Wang - Welcome and congrats on getting started! A lot of landlords start small with 2-4 unit properties and later sell off their portfolio to upgrade to something larger that they couldn't afford or didn't have the necessary experience to do when they started. That's another path you could consider...Best of luck!
Lucas Machado That was my plan buy a few properties and see how they go but I may just five right in and go for something bigger since I'm in unique position. I think I may do some private lending and a few triplex's and see if I can learn a bit... Even if I did go for it and purchase a bigger complex if I did my homework it may be better to learn on the fly rather than buying all smaller properties and having to sell to upgrade and pay taxes ect.