A Florida-based investor has successfully converted a $360,000 condo portfolio into cash-flowing rental properties using a widely cited investment metric. Ted Garber, a part-time investor, purchased three occupied condos in September 2022, located approximately 90 minutes from his primary residence. The properties were acquired as a single portfolio and have since generated consistent rental income with minimal hands-on management.
Garber’s acquisition and management approach
Garber and his wife, Jamie, expanded their real estate portfolio beyond their local area after determining that nearby markets did not offer sufficient cash flow opportunities. The three-condo purchase marked their first out-of-area investment and an experiment in remote property management. According to Garber, the couple has visited the properties only once in the four years since acquisition and spends less than one hour per week managing their broader portfolio of 29 tenants.
The condos were initially listed together on LoopNet, a commercial real estate platform, with a combined monthly rent of $3,675. This figure represented approximately 1% of the $360,000 purchase price, a threshold Garber uses as a preliminary screening tool. Known as the 1% rule, the guideline suggests that a property’s monthly rent should equal at least 1% of its purchase price to increase the likelihood of positive cash flow. Garber noted that the listed rents were below market value, presenting an opportunity for future increases.
To finalize the purchase, Garber negotiated the price downward from an initial listing range of $390,000 to $400,000. The transaction was verified through an ALTA Settlement Statement, and ownership was confirmed via landlord letters detailing the rent for each unit. Garber cited the stability of the area, located outside Orlando’s Disney corridor, as an additional factor in his decision-making process.
Financing and operational strategy
Garber did not disclose specific financing details but emphasized that the deal’s viability relied on the 1% rule as a starting point. He also highlighted the potential for rent escalation as a key driver of profitability. The properties were purchased occupied, which reduced vacancy risk at the time of acquisition. While Garber did not provide a breakdown of expenses, he stated that the portfolio now generates positive cash flow after accounting for mortgage payments, property taxes, insurance, and maintenance.
The Garbers’ approach to self-management has allowed them to scale their portfolio without on-site oversight. Garber attributed their success to selecting properties that met his initial screening criteria and leveraging market inefficiencies, such as below-market rents, to improve returns. He did not specify whether he plans to replicate this strategy in future acquisitions.
Market context and investment considerations
The condo portfolio’s location in Florida, a state with relatively low property taxes and a high demand for rental housing, contributed to its appeal. Florida’s population growth and tourism industry have historically supported strong rental demand, particularly in areas outside major tourist hubs like Orlando. However, Garber did not address potential risks such as regulatory changes, market saturation, or economic downturns that could impact long-term profitability.
Investment experts note that the 1% rule is a simplified metric and does not account for all variables affecting cash flow, including property-specific expenses, financing terms, or local market dynamics. While the rule can serve as a useful initial filter, it is not a guarantee of financial success. Garber’s experience demonstrates one pathway to achieving positive returns, but individual results may vary based on a range of factors.