Strategies for Transitioning to Multifamily Properties with Positive Cash Flow?

[Daniel Reed]

Hi everyone, this is my first post! I found this forum through the audiobook Crushing It in Apartments and Commercial Real Estate.

I live in the Bay Area in CA, but have invested in Florida, where I fully own three townhouses bought over the past 10 years. They've been solid investments, with rising rents and property appreciation, but over the last 2 years, skyrocketing HOA fees and stagnant value growth have reduced cash flow. While still profitable, I'm exploring better opportunities and considering multifamily (MF) properties.

In my search for $1M properties (with $150K–$180K down payments), I've found that the NOI often matches the mortgage payments, leaving little to no monthly cash flow. I've focused mainly on Florida but have also looked at options in Sacramento and other slightly more remote locations in CA.

While I’m familiar with value-add strategies (ADUs, renovations or storage rentals), these seem like heavy lifts for modest gains. How do others manage to create positive cash flow from MF properties with debt? Any advice would be greatly appreciated!