Should i sell or hold a Multifamily in Jacksonville FL

Marketing Your Property
3yFollow

Should i sell or hold a Multifamily in Jacksonville FL

Wendy Martin
Member since 2021 · 2 posts · 1 vote

I’ve inherited a Duplex near downtown Jacksonville FL. I’m trying to decide if I should hold or sell. It is currently vacant and almost completely renovated. Value estimated between 400-460k with monthly rent est 3k. There is no debt but I live 2.5 hrs away.

1Reply
17 views

12 Replies

Jump to latestLatest
  • Nick Terrano
    Lender · Jacksonville, FL · Member since 2021 · 20 posts · 3 votes
    3y

    If its rent ready and no debt on it this could be a good property to hold onto and you could hire a good property manager so you can be more hands off. That said it just depends on your goals, if you currently need some capital for example then you could cash out of it. If you can see yourself holding it for 5 years or longer then I would! Not a bad problem to have though! 

    0Reply
  • Dylan Speer
    Investor · Denver, CO · Member since 2023 · 161 posts · 52 votes
    3y

    Hey Wendy,

    It's hard to say what you should do since a lot can factor into a decision like that. What I will say is that you can always consider a 1031 exchange into a passive income play like a DST (Delaware Statutory Trust). These are 1031-exchangeable syndications that are only opened to accredited investors. DSTs are funds put together by a sponsor (finder of the deal, the party that acquires the property in the DST and opens some equity to investors).

    An example of a DST is a student housing building at the University of Alabama, let's say. The sponsor will acquire the asset with leverage, say 50%. Now, investors who just sold property and have a similar debt to equity ratio from the sale of their property can invest in this DST and replace both their equity and debt. The cool part about a DST is that the sponsor takes on the debt and the investors just benefit from it for the sake of their exchange. The investors do not take on debt on their balance sheet and are not responsible for repayment on the debt should the investment go south. 

    These funds usually pay anywhere from a 3-6% annualized cash on cash return (cash flow), and have anywhere from 5-15% appreciation when the fund sells the asset they hold (anywhere from 5-10 years down the line). The investor can then 1031 exchange into the next DST and continue to earn passive cash flow from being a partial owner in an institutional real estate asset like a large class A multifamily building, a self storage complex, or a large triple net industrial building.

    Often times, investors find that their passive DST investments out-perform their former actively managed properties. Feel free to reach out if you'd like to hear more about DSTs. I work at a firm that specializes in helping clients exchange into DSTs and other syndications. Thanks.

    0Reply
  • Wendy Martin
    OP
    Member since 2021 · 2 posts · 1 vote
    3y

    @Wendy Martin

    I’m only considering selling because I just received this offer:

    Purchase price: $400,000

    Downpayment: $200,000

    Monthly Payment: $964.39

    Interest rate: 5%

    1 year balloon

    I’m just not sure how good it is.

    0Reply
  • Joseph BeilkeBusiness Member
    Real Estate Agent · Palm Coast, FL · Member since 2018 · 364 posts · 244 votes
    3y

    @Wendy Martin

    I have a few investors that I'm looking for and one myself, this could be a option for a few of them.  Would love to learn more about the property, I'll send you a DM.

    240-676-4927
    Enkore Real Estate & Property Management4.836 Reviews
    WebsiteView Page
    0Reply
  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    3y

    Depends if you want to be in real estate or not. It sounds like a good rental property and if you don't need the money, I'm all about holding real estate long term. I think it's the best way to wealth so I would lean toward holding. Maybe wait until rates dip down some before putting any debt on it though.

    Podcast Guest on Show #121
    0Reply
  • William Arrington
    Gainesville, VA · Member since 2021 · 82 posts · 72 votes
    3y

    It depends on what you want. I would put in an LLC or the like depending on your goals then pull money out for a down payment on another unit... then rinse and repeat. You have a unique opportunity and can afford a property manager.

    0Reply
  • Mark MunsonBusiness Member
    Lender · Orlando, FL · Member since 2022 · 440 posts · 300 votes
    3y

    Hi @Wendy Martin

          I would hold it if you can, as you'll make more money over the long run by holding at least a few years. If you want cash in hand today, then I would take out a small loan relative to the overall value and get it rented. You can put a little money in your pocket and have passive income every month. Feel free to message me, I'd be happy to walk you through each scenario and give you any advice I can. I'm in Central FL and we lend/buy in Jax too, so I know the market well. 

    [email protected]407-900-8799
    CapSource LLC4.947 Reviews
    WebsiteView Page
    0Reply
  • Dave FosterBusiness Member
    Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
    3y

    @Wendy Martin,  Another factor to consider - depending on when you inherited it the property might be able to be sold tax free by you.  A marginal investment sold for 100% tax free dollars is a bit of an incentive.

    The 1031 Investor5137 Reviews
    WebsiteView Page
    0Reply
  • Bud Gaffney
    Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    3y

    @Wendy Martin hire great PM and hold

    0Reply
  • Bud Gaffney
    Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    3y

    @Wendy Martin or 1031 exchange into a bigger project

    0Reply
  • Minna Reid
    Real Estate Broker · Jacksonville FL & Middletown, CT · Member since 2008 · 1k+ posts · 632 votes
    3y
    Quote from @Wendy Martin:

    @Wendy Martin

    I’m only considering selling because I just received this offer:

    Purchase price: $400,000

    Downpayment: $200,000

    Monthly Payment: $964.39

    Interest rate: 5%

    1 year balloon

    I’m just not sure how good it is


    It sounds as if this buyer wants you to seller finance the home?
    $200k down is a pretty strong down payment for seller financing, if you are willing to carry the note. 

    However - if the property was worth $460k, and you wanted to cash out fully now, you would get more by just listing it. 

    You could also just keep it and take the monthly cash flow. There are lots of property managers here. 

    I guess it depends on your personal goals. However, your numbers sound unsure. 400-460k is a huge range, and I can't imagine why someone would pay that to receive $3k/month in rents. 

    I highly recommend you talk to someone that can give you accurate numbers on the value of the property and the rents before you make any decisions. You can certainly reach out to me, or another local realtor or appraiser. 

    0Reply
  • Arthur Schwartz
    Investor · Baltimore, MD · Member since 2019 · 164 posts · 46 votes
    3y

    You may want to consider the cost of insurance.  Dwelling fire insurance, for a landlord, can be rather expensive in Florida, and a flood policy would increase that cost substantially

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free