Ted Garber did not set out to become a long-distance landlord, but after struggling to find the cash flow he wanted close to home, he broadened his search.
Looking at neighboring counties “really opened up the opportunities for us,” the part-time investor, who has built a portfolio of Florida rentals alongside his wife, Jamie, told Business Insider.
In September 2022, the Garbers bought three occupied condos listed together for $360,000. The properties were about a 90-minute drive from their Florida home. It was their first out-of-area acquisition — and an experiment to see whether they could self-manage rentals without being on-site regularly.
Four years later, Garber said they have visited the properties just once and spend less than an hour a week managing their broader portfolio of 29 tenants.
He opened the books on the deal and shared how he picked the condos, financed the purchase, and turned the portfolio into a cash-flowing asset. BI verified the purchase and the Garbers’ ownership of the three condos by reviewing the final ALTA Settlement Statement and new landlord letters showing the rent for each unit.
A portfolio that passed the 1% rule
Garber found the three-condo portfolio on LoopNet, where the listed gross rent immediately caught his attention. At the $360,000 purchase price, the condos generated $3,675 in combined monthly rent, just over 1% of the price.
That satisfied Garber’s initial screening tool: the 1% rule. The rule of thumb suggests that a property’s monthly rent should be at least 1% of its purchase price to have a reasonable chance of generating positive cash flow. It is not a guarantee, but it is a quick way to decide whether a listing is worth investigating further.
He also saw room to increase rents, which he determined were below market, and liked the stable area outside Orlando’s Disney corridor.
To make the numbers work, however, he had to negotiate. The condo portfolio was initially listed for between $390,000 and $400,000, he said.
That’s a typical step in his process, he added: “I always negotiate. If it’s really a steal, I’ll do full asking immediately with a seller concession or something.”
Due diligence and the purchase
Before making an offer, Garber makes sure his financing is in place. In this case, the couple financed the purchase with a commercial loan amortized over 20 years at an interest rate of roughly 5.5%.
He said they put 25% down and invested $113,548 in total, including the down payment and transaction costs.
Because the condos were occupied, Garber reviewed the existing leases, comparable rents, HOA finances and reserves, association rules, and the condition of each unit. His wife attended the inspection, giving the couple an opportunity to see all three homes while tenants were in place.
Rent rose, but so did costs
The portfolio’s combined monthly rent has risen from $3,675 at acquisition to $4,530 today. Its monthly expenses include:
- Loan payment: $1,744.83
- Property taxes: $500
- Insurance: $408.78
- HOA fees: $906.01
Garber said HOA dues and insurance costs have roughly doubled since purchase, reflecting rising insurance rates and inflation. Those expenses have reduced the portfolio’s returns, though he still considers the deal “very healthy.”
The 20-year loan has also helped build equity relatively quickly: $721.05 of the current monthly payment goes toward principal. Garber said the portfolio’s tenants have paid down $30,041 of the debt, or about 12%, over roughly four years.
“We’re getting monthly cash flow, and our tenants are paying off the mortgage,” he said.
The rent strategy: below-market rates
Garber could likely charge more for the condos. Instead, he prefers to keep rents at or slightly below market.
The strategy is partly financial — lower rents can mean fewer vacancies, lower turnover costs, and less time spent finding new tenants — but it also reflects the kind of landlord Garber wants to be.
“When you do rent to people that are below market or at market, they’re really thankful for that,” he said. “They take care of your properties for you a little bit better.”
Garber is still looking for deals, but he said higher interest rates and strong property values in his market make it harder to find leveraged investments that produce more than 8% to 10% cash-on-cash returns.
He would still seek properties that combine monthly cash flow with built-in equity — especially listings that may be overlooked because of weak marketing, poor photos, or other correctable issues.
“You make money on the buy,” he said.
Asked what he would do differently with the three-condo portfolio, Garber’s answer was simple: “We would have bought more.”
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