Strategy for STR investment

[John M.]

So I turned my residence into a rental about 20 yrs. Ago.  Did a 1031 exchange into a multi-family 6 yrs. Ago.  Current value is approximately 300k.(actually I have no idea what this market could bring) I like the fact that STRs produce more cash flow than a monthly rental. Loan debt is 74k.

I'm looking for some advice on strategy. I was thinking of south west Florida locations. Would you buy one property? Multiple properties? Maybe storage units? DST? With how fast real estate is moving is it even wise to try and identify 3 properties to satisfy 1031 requirements? Maybe sell…pay cap gains tax and get my wife the beach condo she would like? I value the opinions here on BP. Looked like a good place to start. Thank for reading.

[Collin Chan]

I'm doing a 1031 exchange now selling a house in the Bay Area that was only cash flowing $300/mo on $3400/mo rent as a long term rental with a very low ROE. Identified 3 properties in a high STR area that could gross up to $36,000/mo gross and cash flow far exceeding $300/mo.

While searching for those 3 properties, I had opened the deal flow looking at options ranging from multi-family, mobile home parks, high end homes we'd like to retire in, and various STR markets. Ultimately, we settled on the highest cash on cash returns we could get. The great house on the water would have been nice but it's not in our near future and ultimately would not be the best return on investment since we're still in the wealth building phase.

Depending on where you're at in life, decide if you want to transition to that dream property for you and your wife to enjoy with some income or if you are still building the income to pay for that property you want later.