Multi-Family Units - How Profitable Are They?

Multi-Family Units - How Profitable Are They?

Many people dream of owning their own multi-family units but figure they could never afford to buy it. Well lets take a look at that.

In todays market, everything is dropping. Single family houses, multifamily units, commercial properties and even vacant land. The one thing they all have in common besides the falling prices is that the owners want or NEED to sale. So lets look at how they compare:

Price per square foot is about the same as a single family home.

If you purchase a house, you have to put a tenant in it and that takes a while, but if you purchase an apartment complex or multi-units they are usually already occupied and have a positive cash flow instantly.

Financing is about the same for both. Most lenders will let you do a convention personal loan for up to four units. For more than four units there are massive amounts of investors that would jump on the deals due to the fact that they allow more than one lender on the deals.

With Multi-family units, especially larger ones, it is a great ROI (return on Investment) for the buyer. Another way to put this type of deal together is to use other family and friends as equity partners of straight investment/business partners. That way, there may be lets say five of you wanting to buy apartments but neither of you can hold that amount of loan just by yourself so you pool your resources and make the purchase and share the profits. You cant loose unless you just have no tenants.

Think about it, multi-family units can bring profits to you like single family homes can't. It is harder to oversee and track 12 SFR as opposed to 12 Units, the cost is much lower and the maintenance is at a minimum.
Also the insurance rates for a lot bunch of units is almost the same as for one unit. And there will be times when you will find sellers of this type of property way more motivated that SFR owners especially around tax time, so start looking.


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