Investing (Single, Multi, Condo)

[Rafael Ramos]

Hello everyone,

I'm looking for some advice on investments and would love to hear about what’s worked best for you. I currently have a solid base of liquid assets and am looking to diversify my investments.

I own two fully paid-off single-family homes in Tampa and am currently considering buying a luxury condo in Hallandale Beach for $600K. The condo has an HOA fee of around $1,100 per month and offers the option for short-term rentals. It's located at the Hyde Resort.

I’ve also been exploring multifamily properties, but prices in Miami and Broward County seem outrageous. The cap rates are only around 5-6%, which I’m already achieving with high-yield savings accounts—without the hassle of property management.

I’m wondering if it’s worth pursuing the condo in Hallandale Beach or if I should consider investing out of state. My main goals are to diversify from my current business and to invest in assets that can help lower my yearly taxes.

What would you suggest? Has anyone had success with out-of-state investments, or does it make sense to stick closer to home? Thanks in advance for your insights!

[Corby Goade]

This really isn't a question of what's the "best" way to invest, it's more what works well for you, your resources and lifestyle. 

Depending on the market, a 5 or 6 cap might be great, especially if there is a higher proforma cap and you can force higher value. Speaking generally, those lower cap rate markets are also higher quality, better tenants and more passive. Putting value add on top of that can be a great way to build a passive portfolio that doesn't drain your will to live. Those markets dealing with 10+ caps are usually pretty rough areas and you get needy tenants, higher Vacancy, higher maintenance costs and turnover expenses. 

Personally, I don't like condos- HOAs and surprise special assessments can eat up any potential profits and in most states, they can just change the rules when they want to and decide that LTRs or STRs are no longer allowed. 

Personally, I like small multis in growing areas with vacancy Rates under 3%. I buy B or better properties, generally. To be honest, they don't always start out as great deals, but when you buy in higher quality areas, they get better and better every year. 5-7% annual rent growth and appreciation adds up to a significant amount after 5 years or so.