Multifamily properties are often touted as one of the best avenues for real estate investors. The solid monthly revenue generated by these properties is very attractive to investors, and their stable nature means securing financing is relatively easy. However, their high demand also means finding a quality multifamily property to invest in can be a struggle. If you’re new to real estate investing, or are considering a multifamily property for the first time, you may be wondering where to even start searching for one of these properties. Even if you’re a seasoned investor, it can be hard to find properties worth investing in with the current market climate. In this post, we’re going to cover a few different methods to narrow your search and help you find your next multifamily home.
Before you begin looking for a property, you’ll need get specific about the type of property you are looking to acquire. The size and the number of units will be the main criteria that determines a property’s value. If you aren’t sure about managing a large number of units, or want to manage the property yourself, you would be better off sticking to a multifamily home with less than 10 units. You should also decide on the general location of the property. Homes in a safe neighborhood with access to amenities like restaurants, shopping areas and good schools will be in high demand, meaning property values and rents will both be higher.
After you have decided on the property’s criteria, the first places you should look are online listing services. There are many websites that have listings for both residential and commercial multifamily properties. Zillow, Trulia, and Realtor.com are great for finding smaller multifamily properties (usually with less than 10 units). For large-scale and commercial properties, you will need to look through sites like Loopnet and Crexi which specialize in those types of properties. The best deals for multifamily properties will not be found online, though. Those deals will be found off-market and will require some more research effort on your part as the investor.
You are more likely to find a multifamily property worth investing in if you’re willing to work with real estate professionals. You should look into hiring a multifamily broker, or a real estate agent with experience in multifamily properties. As mentioned, the best deals will be found off-market, and you might find your next deal by contacting the owners of multifamily homes in your area. Even if the property isn’t listed for sale, they may be willing to accept the right offer. Regardless, you will want to have a real estate agent in your corner to help facilitate the sale. A quality real estate agent might even be able to find you off-market deals before anyone else hears about them.
If you have found a great deal on a multifamily home, and have decided to go through with acquiring it, you will want to go through a few procedures before actually closing. Mainly, you will want to hire an inspector to make sure the property isn’t in need of major repairs or dealing with a huge log of backdated maintenance. There could be a reason the seller is willing to let go of the property for so little. Again, a good real estate agent will be instrumental in the purchasing process, as they will be able to negotiate a good deal for you given the condition of any property you’re interested in. Finally, you may want to crunch the numbers to see how profitable the investment will really be. A good yearly ROI will fall in the 5-10% range after all costs and expenses are factored in.
The easiest way to save on your next multifamily investment is to obtain financing from a trusted real estate lender that can get you the best rates. RCN Capital lends to real estate professionals, commercial contractors, developers & small business owners across the nation. We provide short-term fix & flip financing, long-term rental financing, and new construction financing for real estate investors. If you are an investor looking to finance a multifamily home, RCN Capital has competitive loan options available. Connect with us today to discuss your next real estate investment.