Investing 2M in Tampa

[Christian Orellana]

Family owns a property in NYC. We are thinking about selling it and investing in Tampa through a 1031 Exchange. What areas in Tampa do you recommend for a decent cash flow. We want to buy single family homes for rent.

If Tampa isn’t a good idea, please feel free to recommend areas in Florida.

Thanks in advance

[Josh Green]

Quote from @Christian Orellana:

Family owns a property in NYC. We are thinking about selling it and investing in Tampa through a 1031 Exchange. What areas in Tampa do you recommend for a decent cash flow. We want to buy single family homes for rent.

If Tampa isn’t a good idea, please feel free to recommend areas in Florida.

Thanks in advance

1) Focus on good areas for both appreciation long-term and strong rental demand.  When markets are up, everyone is feasting but when it slows like right now, the C and D class neighborhoods are having the harder time to fill vacancies.  There's pockets all over the greater Tampa Bay Area that are B class and up but balancing that with a decent cap rate is going to be tricky unless you either have low cap rate expectations or are will to do value add to the property or being more creative such as using a short or midterm rental strategy or even room by room with padsplit.

2) Verify as well the 1031 is going to allow "like for like" into a single family.  You didn't mention if those funds are from a residential real estate rental or commercial.  

3) Shameless plug for Tampa: you will definitely find higher cap rates in cheaper places.  Maybe Jacksonville, smaller towns, or other places "less desirable".  However, Tampa+Orlando are projected to lead the state in appreciation over the next decade so that's why I personally chose to put all my focus and even moved across country to invest in the Tampa Bay market.  Appreciation is far more valuable for the seasoned investor and it's no mystery why the BP podcast has been talking about that over cash flow a lot in there more recent episodes.