Close to retirement and trying to set things up

[Gilles D.]

Hello there,

I am asking these questions on behalf of my father who is close to retirement as a GP in Europe.

The house he lives in/has his practice at is paid off.

He has made some rather large/costly mistakes with investing, which is why I'm trying to help out this time.

Currently he owns some properties in Florida, one condo, one single family home/villa.

The condo we are looking to liquidate because the HOA/taxes are through the roof, that will net about 100K after expenses and closing out the mortgage. Currently he also has a mortgage running on the villa, which runs about 4 grand a month. It has been vacant for a while now but looking to get it rented at 4 grand at least to cover the mortgage. There is about 500K left on the loan there.

He could free up some cash here by liquidating some assets, since the margins in Florida are almost double than what they are here in Europe. That would be close to 600K dollars.

He is looking to retire and the goal would be to generate 5-10K passive income and to grow that, while being retired. His retirement is only around 1200 dollars a month.

Now my questions:

1. Should he hold on to the villa and try to rent it out, it's been vacant for so long because of bad property management(got new management there right now) and the mortgage has been a pressing expense without it generating any income. The house was bought around 750K and is going for close to 850K now. - In my opinion, and I am not very experienced. Wouldn't it be better to sell it off and get multiple units with this money that will be freed up after the sale? NOTE: Taxes are also HIGH around 1000 a month. Since the mortgage is so high - we'd want to look into refinancing as well, but is that a smart idea if we're looking to sell the property quite soon ? (within 5 years)

2) With the 600K he can free up here in Europe, what would be a good approach to invest that in FL as well? Buy 3 units with straight cash so they all constantly generate cash flow? People everywhere tell me to ALWAYS try to loan since then you get to leverage the bank's money, but the position my father is in, isn't it smart to pay 3 units off with that money and let them generate income? After 3-5 years he could have enough reserve built up for major expenses and probably enough cash to put down anywhere between 50-100K on a property again and generate more positive cash flow? - in the US do you get taxed for having a certain amount of money in the bank? Meaning: do you constantly have to reinvest that money, or you are "allowed" to have a solid reserve(for larger expenses like a roof or something) sitting there without it being taxed?

Also: If you buy 3 units with that 600k and they're completely paid for with cash - wouldn't the rental income be taxed higher because now you don't get to write off the interest money from your mortgage ? I know you can write off the depreciation and a bunch of other expenses but this goes back to the idea of not using the bank's money as leverage of course.

Would it be a better scenario to buy 2, fully paid for in cash, and then a third but bigger property where he gets a mortgage since then it'd be quite rare that BOTH those units are vacant AND the third one. IE. at least one of them would be covering the mortgage for that 3rd one...

PS: the country we are in has a double tax treaty with the U.S. so then I'd assume as long as the taxes are paid/taken care of, anything after that we could transfer 100% tax free to our account here in Europe?

Open to any suggestions and they are greatly appreciated. I understand he is in a privileged position but has not been very fortunate in his investments up to this point and would like to help him turn this around and retire comfortably after working for so long.

Thank you!