Need some advice on investing 400k to 500K

[Tony Sepassi]

Hi Guys,

It has been awhile since I have posted,  been a busy 3 years. Started flipping and now I'm on my 4th flip a big property in DC.  Found some solid contractors and I have learned so much.  Now I'm thinking, I have a condo which is worth around 500K and the rent is 2150 but after condo fees and management fees it is a lousy $1450 a month.  So I'm thinking of selling and buy a multiunit apartment building but trying to see what state is a good choice?   

I have looked at Arizona, Ohio, Texas and Florida and it seems they have some good properties with cap rates in the 7 to 8% but I prefer DC or MD but as usual properties have lower Cap rates.   I want to have a monthly income so I can quit my job and concentrate on the flip.   So any advise is appreciated.  Thanks!

[Russell Brazil]

Cap rate is a reflection of the risk of the asset and or market.  Markets and assets with less demand, or higher risk will have higher cap rates. Markets and assets with high demand, or lower risk will have lower cap rates.

You need to deploy capital based on our risk tolerance.

Higher cap rates will typically have lower asset price growth and lower rent growth.

Lower cap rates will typically have higher asset price growth and higher rent growth.

Choose which is more important to you, or a happy medium then deploy your capital based on that cap rate. You wont find 7%-8% in a low risk market like DC. You can take on as much risk as you want and achieve higher cap rates.