Should I sell Utah property for Multi-family in Orlando?

6 Replies

Hi All,

It's been a while since I came on here.  I have a single family home in Tooele, Utah.  It's paid off, and currently get $1550/month.  The home I estimate can be sold for ~$230K-$250K.

I'd like to get some advice on strategy.  I'm contemplating if I should sell my house in Utah, and use that money for down payment on a larger multi-family unit in Orlando or maybe Tampa?

It seems Orlando and Tampa are some rental markets.

OR....should I just hold my Utah home forever, and just save up enough down payment for another investment property, which could be a while.

Just curious what strategy is best, basically. Whether to just gather up a bunch of properties, or keep selling to upgrade to more and larger multi-family units.

  

@Mike Xiao that is a good question. I would suggest that if your Tooele property is free and clear and you have a rock solid property management company in place then I might do a cash our refinance. Then you keep that property but still get some cash for a down payment on your next set of units. 

If anything about the Tooele property is shaky (causing a headache) then I might consider selling. 

I say dont kill a cow that still has good milk. 

You say it seems like Orlando or TV has good rentals. I take it you've never 🐝 n there or not really sure of what's there. 

I say hold to what you got till you KNOW what's going on down there. 

@Eric Gardiner made a good point. You can probably find a credit union that would do a cash out refinance for maybe 70% LTV and if the property is valued at 230-250K you could possibly put 161-175K cash in your pocket keep the rental in Toole and go buy a few properties in Florida or wherever you decide to buy.

All depends on how much you want to leverage yourself out.

@Mike Xiao The Orlando & Tampa markets are great rental markets. Both are very strong and competitive markets for investors as I'm sure you know. You may be able to upgrade into a mult-unit property in this area and set yourself up for more future growth/passive income. I would advise at the very least actively looking into it and seeing what your options are and if something is appealing enough using a 1031 to put into another, larger property with a ton of potential. 

@Mike Xiao , Both Orlando and Tampa are still below their 2005 highs for property values (as of a couple months ago).  So if you're looking at a normal cyclical market curve they both have some more upside before a natural correction.  

Hillsborough/Pinellas County (Tampa/St. Pete) and the outlying upcoming areas like Brooksville have a better chance of improving your return with MF.  

Orlando MF for the most part is stupidly priced. But your NOI return right now is probably around 4.5 - 5% and that's not too tough to beat.

Sell vs cash out?  Well if you sell the only way it makes sense is with a 1031 or you'd drop all your hard earned gain for a better return and that's a break even game - no fun for anyone.

Cash out refi - watch out in an environment of rising rates.  It would be no fun going into a market correction to be in a downward rent rate spiral for a while with a note that can't cashflow.  Run the numbers.  Honestly you can beat your current return in all cash without debt.

Hi @Mike Xiao

Orlando/Tampa markets are strong for rental holdings. I agree with @Eric Gardiner here, if it were me in your shoes I would consider getting a HELOC on the UT property (because its the cheapest money you can borrow) and keep that cash flow going. Find a property in a market you like, buy it, get it rented and double down on your cash flow.

Let me know if you would like to look at some listings in the Central Florida market and I'd be happy to help.