For most landlords, the idea of a multifamily apartment complex is a huge investment. If you’ve been thinking about taking it a step further, this is probably where your thoughts go. In terms of long term investments, multifamily is definitely the way to go- they’re an impressive source of monthly income but also, they offer a wealth of tax incentives. The problem is, it’s not the same as if you were still working in single family. Even getting the mortgage is a bit different.

If you have decided that you’re going to venture into multifamily, the first thing you need to know is that you won’t be finding for sale signs out front. This is because that tends to make the tenants that live there pretty nervous, so it’s avoided. When you have nervous tenants moving out, you have an increase in vacancy rates- which leads to lowered property value.

What they typically do instead is list privately. One of the best ways to find these properties is to enlist the help of a real estate broker. You can also search online, and there are a number of resources for that. Before you settle on a property, you will want to have a look at their rent roll, the expenses, and determine the capitalization rate on your investment. This holds particularly true if you plan on getting a multifamily mortgage. They will also be looking at these in order to determine if the loan is a good idea.

You might also want to look at the bank owned properties, foreclosures and REOs. This is one way you can typically find a great deal- mostly because banks do not want to deal with managing a property. It can be difficult, however, to get a loan on a foreclosed property, so unless you have the cash, it may be best to give those a pass. Lenders aren’t usually favorable of those as they are distressed assets and aren’t typically boasting high occupancy.

You don’t prequalify for a multifamily property, like you would if you were buying a single family home. Instead, you go through the property’s operating income and you discuss whether or not that will be enough for the downpayment you have at hand. It’s always best to be working with several lenders, but also, work with one that is knowledgeable of multifamily mortgages.

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Kurt Kroeck has written articles in real estate, law, and art related niches for a number of high profile publications. He is an avid WW2 re-enactor, artist in graphite, charcoal, and digital media. He volunteers in animal rescue and enjoys spending time with his children.

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