Why Multifamily Is the Sweet Spot for Real Estate Investors – And How Brokers Can Capitalize

A multifamily property is one of the strongest additions an investor can make to their portfolio. These properties offer stable income, scalability, and other benefits like appreciation and ease of financing. Multifamily homes are consistently in demand, which helps them achieve these advantages, but that also means it can be difficult to secure one as an investor. As a broker, your role is to guide your clients not only on acquiring financing for a property, but also understanding the benefits of these investments, and finding the right property.

Continue reading as we break down the benefits of multifamily investments, and lay out how brokers and lending partners can capitalize on this asset class to grow their businesses.

Why Multifamily is the Sweet Spot for Real Estate Investors

Multifamily homes provide many advantages to investors, which makes them an incredibly lucrative asset to add to an investment portfolio. These advantages include:

• Strong Demand and Market Stability: Multifamily homes are consistently in demand because people will always need places to live. As younger generations consistently choose to rent over owning homes, the demand for these properties also continues to grow. This aspect also helps make multifamily properties more resilient to economic downturns when compared to single-family or commercial properties.
• Scalability: It is no secret that multifamily homes allow investors to scale their portfolios quickly, since they can acquire multiple income generating units in one purchase. The other benefits of this scalability are easier property management and lower maintenance costs since they are often shared across all the units in the building.
• Attractive Financing Options: A little-known fact is that securing financing for a multifamily property can often be easier than with a single-family home. Along with vacancies posing less of a risk to overall income, the stability these properties provide can help secure favorable loan terms, especially with lenders that specialize in multifamily financing.
• Long-Term Appreciation and Wealth Building: Aside from the rental income multifamily homes provide, the consistent demand for these properties offers investors additional returns through appreciation. This can even help investors expand their portfolios by allowing them to leverage equity with refinancing strategies.

The Broker’s Opportunity: How to Capitalize on the Multifamily Boom

Brokers play a key role in guiding their clients to make smart investments in multifamily property, and it also opens the door for new opportunities to grow their businesses. Here are a few ways brokers can provide the most value for their clients:

• Educate and Guide Your Investor Clients: It is important to position yourself as a trusted advisor on multifamily investments. Stay informed on market trends and financing options and offer your clients insights into which markets and properties they should target with their investment strategy.
• Build Relationships with Lenders and Wholesalers: Building relationships with real estate partners will help you provide more value to your clients. Having a number of lenders you can work with will allow you to match clients with a financing option that best suits their project and working with off-market professionals lets you source properties that other investors will not have access to.
• Identify High-Potential Multifamily Markets: The key to success with any real estate transaction often comes down to location. For multifamily properties, a location that’s in high demand can boost both rental income and appreciation over time. Take time to research and identify areas with strong rental demand, supported by evidence like growing population numbers, property values, or infrastructure developments.
• Leverage Creative Financing Strategies: Investors do not have to be limited to working with conventional lenders like banks or credit unions. These lenders often have limited loan options for multifamily properties, and stringent criteria that will not suit every borrower. Instead, connect your clients with financing options like bridge loans or DSCR loans from private lenders, which can fulfill a wider range of project requirements and borrower profiles.

By providing your clients with superior customer service, insights, and resources, you position yourself as a one-stop solution for multifamily investments, making them more likely to return to you for future business and refer new clients to you.

Actionable Steps for Brokers to Grow in the Multifamily Space

There are also some key strategies brokers can utilize to maximize their success in the multifamily space:

• Specialize in Multifamily Investments: Establish yourself as an expert in multifamily property to attract clients that are interested in this asset class. You can achieve this by analyzing data on multifamily properties in the areas you serve and identifying lucrative opportunities you can recommend to clients. Then, you can market yourself as a multifamily expert to reach a new segment of the investor market.
• Use Technology to Find and Close Deals Faster: Brokers can utilize analytical tools to provide more relevant recommendations to clients and close more deals. Making use of data aggregators like ATTOM Data and REiDEALMASTER allows brokers to identify trending neighborhoods and undervalued properties to help clients achieve their investing goals.
• Stay Top of Mind with Email Marketing and Educational Content: As you start to establish yourself in the multifamily space, you can stay in regular contact with past clients to keep up a regular flow of business. For example, you can send out emails to clients with property deals to encourage them to work with you on adding them to their portfolio. You can also provide clients with educational resources on different markets and financing options, or schedule webinars on relevant topics to keep them engaged.

RCN Capital

The best way to save on a real estate investment is to obtain financing from a real lender that can provide you with the best leverages and 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 looking to finance a real estate project, RCN Capital has competitive loan options and an award-winning broker referral program available to partners.