investing in a 1bd/1ba multi-unit rental property 55+ in fl

6 Replies

considering investing in a 1bd/1ba multi-unit rental property 55+ in fl. there is no HOA and it allows rental, most units are already rented with just one unoccupied. started an LLC to own and manage the property. ideas in this? would it be a good investment, nice community, lake front close to golf camp and trailer park

@Niurka Castaneda

Are you paying cash or financing? If you buy the property with a new LLC, it won't have a credit history. So, you'll need to give it a personal guarantee.

Buying the property with an LLC also means that you'll have to use commercial financing, which means higher than average rates and 30%-40% down payment.

It would be easier to buy using regular conventional loan with a lower rate and normal down payment, which would probably be around 20%... It would also give you more flexibility to find a lender that would do a conventional loan on a condo.

@Niurka Castaneda

I usually try to avoid multi-family apartment complexes that are all 1 bedroom units.  Reason being that the property's value is based on the income it generates.  If you have all 1 bedroom units, you have now limited the amount of appreciation it can get.  Also 1 bedroom units typically attract tenants that are not going to be there for too long.

Now on the flip side, if you are able to convert some of the units to 2 bedroom units then you have something going.

This is why I always look for a healthy mix of 1 and 2 bedroom units.  Hope this helped!

they actually have a house that could be converted to a 3plex or duplex and another additional unit of 2 bd, but most of them are 1bd/1ba 

My company primarily develops 55+ rentals (300 units completed, 900 under construction or active development). While the concerns @Steve Kontos raises about the unit mix are valid, the 55+ demographic is much different than a traditional renter. Most of your move outs won't be going to another conventional, rental property. They'll either go to some sort of seniors housing, or, quite honestly, they'll pass away. While we do see couples move-in, nearly 80% of our residents are widowed and want 1 bedrooms. Our typical unit mix is 70/30 1s and 2s. If you manage the property well and take care of your residents, you probably won't see very high attrition and renting your one bedrooms won't be a problem. It is riskier than a more diverse unit mix, but for that demographic, you can pull it off easier than conventional multifamily. 

Originally posted by @Niurka Castaneda :

considering investing in a 1bd/1ba multi-unit rental property 55+ in fl. there is no HOA and it allows rental, most units are already rented with just one unoccupied. started an LLC to own and manage the property. ideas in this? would it be a good investment, nice community, lake front close to golf camp and trailer park

Pretty simple really, regardless of the asset, does it fit your investing criteria that’ll help you achieve your goals? If not you need my 10 Step Guide. 

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