Best advice for investing 100K for income

[Telma Rodriguez]

I live in south Florida and am going to be selling a property I own and will walk away with approx 100k

What do you guys think my best bet is in how to spend that money for maximum income return. I am currently a landlord and have many years of experience  by not selling a couple of properties I have as I moved on so I am comfortable managing tenants. Should I finance or pay cash for properties ? Multi or SF?  Thanks in advance 

[Alan A.]

There's no simple solution here, and what works for others here may not be the best fit for you. With that said, I do a lot of investing in the 90-120k range in Broward/Dade/WPB counties in South Florida, and (personally) find the best return in condos with HOA fees >$300/m.

Unless you come across a diamond in the rough or are willing to take on extensive rehab, you will be priced out of multifamily, and depending on the the areas you are considering, priced out of SFRs as well (assuming you are paying cash). You can still find a solid 7-12% with a cash purchase of a condo. Of course, you should know what you are buying: rental restrictions, HOA financial health, upcoming/outstanding assessments, etc.

If you are willing to buy something distressed and can renovate affordably, you can squeeze out a higher return in our market. I know a lot of people here don't like condos, but from my own experience, all of the distressed REO condos I've purchased in the tri-county area over the past 3 years are performing at 10-14% conservatively. I also believe that however frustrating SoFla HOA bureaucracy can be, that in most instances, it is well worth the peace-of-mind of not having to concern yourself with exterior maintenance and allows for a more hands-off approach if you intend to self-manage. I know there are many experienced investors here that would vehemently steer you away from condos, but they offer a very feasible solution if you intend to purchase with cash and are on a smaller budget.

I'm sure many here would disagree and would tell you to use your cash to secure a loan toward a multifamily, but it really depends on what your goals/expectations are. Cap rates are not fantastic for MLS multifamily in our area on average, although that doesn't mean you cannot find a deal if you know where to look. Many of the multifamily that I have seen with competitive returns around here tend to strictly require cash.

Best of luck.