According to recent findings from Gallup, real estate continues to rank as the top investment pick for the majority of Americans (35%), ahead of stocks and bonds (21%), savings accounts (17%) and gold (16%). For real estate investors looking to move past single-family homes, multifamily homes are a natural next step. Multifamily properties can elevate your income and build your net worth faster, if done correctly.
For those ready to take on the responsibility, here are three steps to get you started on your first multifamily investment.
Educate Yourself
Investing in real estate is not impossible, but it does require proper knowledge of the real estate market and real estate business. Do not jump into the deep end before doing your research. Ensure you know what responsibilities come with owning a multifamily property. Consider if multifamily investment—over single-family—is really the best move for you in your current situation.
Find Your Property And Ensure A Quality Real Estate Deal
As opposed to finding single-family residences, hunting for multifamily property requires far more than browsing Zillow from the comfort of your home. Investors should be prepared for ample due diligence.
When you find a property you like, consider the following to decide if you should pursue it further:
- Location—this should be on the top of your checklist. Ensure this property is in a location desirable to renters.
- Number of units—along with the number of units, consider the number of rooms.
- Potential monthly income—verify the rental prices and potential income that will be generated from your selected property.
- Estimate of important costs—are you considering the down payment, mortgage payment, and repair costs? If you’re not, you should be.
- Seller’s motivation—gain an understanding of who you are dealing with and why they are selling the property. This will prove beneficial when it comes time to close the deal.
Make The Offer
Private, conventional and commercial loans—there are several financing options for investors. Speak with your lender and identify what type of loan works best for you.
Once you’ve secured financing, negotiate the deal with confidence. Equip yourself with knowledge of the seller’s needs, potential objects and prepared responses. Familiarize yourself with the ins-and-outs of your offer and have a firm walkaway number.
For more guidance on multifamily investments, contact CGI Real Estate Investment Strategies at info@cgiplus.com.
