The best ways to find multifamily properties for sale are to utilize a commercial/multifamily MLS, contact commercial brokers, directly contact building owners, and use networking groups, online marketing, and other methods.

You can source a deal directly by looking through county auditor websites for the areas in which you are interested in purchasing property. This website should list purchase and sale dates, building information, and a variety of other data that will be useful if you want to develop a list of property owners to contact. You might also want to look at apartment rental listings, and then use the owner contact information listed in order to determine if they are interested in selling.

In general, you may want to avoid contacting owners who have purchased a property in the last 1-4 years, as they are less likely to want to sell to you at a below-market price (though you never know!).

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The main advantage of multifamily investing is that it provides investors with the opportunity for a steady stream of income. With this type of investment, investors are able to rent out the units to tenants and receive a consistent, ongoing return on their investment. Multifamily investments also offer the potential for a higher return on investment than other types of investments, including single family homes, with less risk.

Multifamily properties also perform better in a recession. While different assets across the quality spectrum will behave differently, people always need a place to live. As multifamily homes generally have lower rents per unit than a single-family home, occupancy generally tends to hold steady even in a downturn.

One of the major upsides of investing in multifamily properties is the guarantee of reliable monthly cash flow from renters. Since multifamily properties are rented out to multiple individuals or families, there’s a reduced risk of vacancies — even if a tenant moves out, you can anticipate rental income from the remaining occupied units. Additionally, in a strong rental market, you will be able to fill vacancies fast, getting back to the initial, higher cash flow.

When buying a multifamily property, the most important factors to consider are the location of the property, the loan options available, and the terms of the loan. Properties in certain areas may be eligible for certain programs or incentives, so it is important to research the area and the available loan options. Additionally, it is important to shop around in different markets to find the best deal.

When it comes to multifamily finance, there are several options available to investors. These include:

• Conventional Loans
• FHA Loans
• HUD Loans
• Bridge Loans
• Mezzanine Financing
• Crowdfunding
• Private Equity

For more information on each of these types of financing, please visit Multifamily Financing: Your Comprehensive Guide.

If you aren’t sure what type of financing or what loan terms work best for your unique deal, get quotes from us by filling in your details below.

Using a real estate broker to purchase a multifamily property has many benefits. A good commercial real estate broker can help you identify quality apartment properties in your area, will have a good understanding of real estate investment fundamentals, and may even be able to help you negotiate on the sale price. This article from Apartment Loans explains the benefits of using a real estate broker in more detail. Additionally, this article from Multifamily Loans provides an investor guide to buying your first apartment building.

The risks associated with investing in multifamily properties include expensive purchase costs, rising construction costs, construction delays, and the possibility that the renovation work may not be enough to get the desired investment outcome.

Buying multifamily properties is significantly more expensive than buying single-family homes, therefore, it is usually hard to enter the market as a first-time real estate investor. While banks are usually eager to provide loans, buyers should be able to come with around a 20% downpayment, depending on the real estate market or the size of the property. Source

Construction costs have risen dramatically over the past few years, impacting both ground-up development projects and renovation work. Make sure you do your research and plan ahead with a strong budget before beginning apartment renovations to avoid any nasty surprises. Source

Construction delays are also an unfortunate fact of life. Due to supply chain issues, some cannot be avoided — so it may be best to take a very conservative approach in terms of your project timeline. Don’t assume you will have rents in place the month after your capital improvements are scheduled to wrap up. Source

Finally, your renovation work may simply not be enough to get the investment outcome you’re looking for. You may invest a lot of capital to add the highest-end luxury amenities to a property built in the 1980s — but if potential renters are looking for a newer building, you may not see much of an uptick in occupancy or rental revenue. Source