An excellent investment type, multifamily properties can offer a profitable solution when venturing into the real estate investing industry.
From duplexes to triplexes, fourplexes to large apartment complexes, these are lucrative properties in the real estate industry.
But, to be able to profit from these property types, first, you need to be able to find them. In this article we will learn how to find multifamily properties.
By digging a little deeper here in your real estate search, you increase those odds of finding more multifamily deals.
Thus, you, too, can take advantage of some of the best types of residential real estate properties on the current market.
How to Find Multifamily Properties
What to Consider on Your Checklist When Searching for Multifamily Properties
Before you begin your search, you may want to note issues such as location, unit numbers, potential income, and costs.
- Location of the Property
A desirable criteria for many, looking to those higher growth and higher yield areas, means higher demand for potential renters. Those neighborhoods will also increase renter appeal.
- Total Number of Units in the Property
Evaluating potential property as a whole before investing allows for less risk and more upside. This means taking into consideration the number of rooms in each unit. Industry experts suggest beginners look here to three types of multifamily properties. These include four-plex, triplex, and duplex properties. These tend to be more affordable when starting out.
- Determining Potential Income
All real estate investors need to practice due diligence, so consider as much as you can before exchanging money. This means learning what income a property could gain. Some investors work by a rule of thumb, and for beginners, this is a good idea. It’s also a great idea to check out top local roofing companies. Most helpful is considering the 50% rule. That is, 50% of the investment income should be spending on expenses, not the mortgage.
- Looking at Potential Costs
Alongside the potential income from multifamily properties, comes costs that need considering. This is especially so with such larger properties as this. Issues to consider here include whether you’ll want to live in one unit while renting the others out. This will factor in your lender qualifying ratio according to MaidThis. Factors such as credit scores, debt to debt ratio, and the subject of down payments will help play a part in initial costs when taking on such property types.
Valuable Tips to Get You Started on Your Multifamily Property Search
Here we offer some helpful advice with no less than six practical tips to help you locate those multifamily properties.
Tip One: Look to Real Estate Listings
Sometimes real estate agents’ listings are the more obvious of places to search for multifamily properties. But some potential investors overcomplicate the process. This results in them overlooking this area in their search!
Yet, real estate listings should be your first port of call here. They could save you a lot of money and indeed time searching further afield. Often, they may present a multifamily property that happens to be down the road from you.
It’s a good idea to start your search by driving or walking around looking for those For Sale signs. Then there are those online real estate websites, newspapers, and magazines. Word of mouth information here can also be valuable.
Thus, once you’ve explored this most valuable area of information, you can then extend your search to other avenues when searching for multifamily properties.
Tip Two: Use the Services of a Real Estate Agent
If you find that searching and seeking out those multifamily properties isn’t your thing – consider asking the professionals!
Though this may well mean spending little money upfront for their services, those specialist real estate agents could help you in your search.
Make sure that the agent you select here has qualifications, experience, and indeed success in the multifamily property listing sector beforehand.
Tip Three: Seek out Eviction Notices and Notice of Default
Many local newspapers will publish local eviction notices. You can also get such information from the local courthouses.
This is a valuable source of information as it can include such multifamily homes that have become distressed and seized by the lender.
Usually, the process here is to offer the property in a foreclosure auction. But when it does not sell here, the lender will be looking to get rid of it quickly and below its market value.
The most inexpensive way for most investors, often these property types are usually the more affordable of ones as well.
Tip Four: Check out Auction Houses
As well as visiting those physical auctions, there are also many online auction websites that you can visit for multifamily properties.
Though these sales will usually need the injection of more cash than those of typical property sales, they can be an excellent way to find such property types.
Tip Five: Place Your Own Advertisements
Some real estate investors find that if they place any adverts online or in local newspapers and magazines, those sellers of such properties come to them.
These can be valuable as they allow for a more specific audience and often generate significant responses.
Consider those places whereby your advert will be seen by those who have such properties to sell. Target local newspapers, as well as particular social media sites and indeed classified sites.
Tip Six: Target Potential Property Types with Direct Mail
By compiling a good list of many multifamily properties, you can arrange a direct mail campaign to target them.
Some people look to purchasing lists from particular companies who can offer them addresses relating to the specific criteria you provide.
Though you may need to work a little harder to ensure your campaign’s target, some real estate investors find this method offers a small success rate.
Final Thoughts on How to Find Multifamily Properties
Ultimately, multifamily properties offer the potential of more significant cash flow and increased control over value. They also encourage a larger pool of tenants while epitomizing scalability.
But, to get that ideal investment property home, it’ll require some preparation and groundwork beforehand. Yet if you put in the effort and resolve to seek out those places mentioned above, you stand a higher chance of generating increased leads.