How to Get Started with Investing in Multifamily Properties
A popular opinion states that investing with multiple living units and renting them out to generate income is the best option to learn the basics of the trade. While investing in multifamily properties is the way to go, being a landlord might not be suited for everyone. Keeping that in mind, there are other ways you can make your investment work directly in multifamily. Here are some ways on how you could start investing in multifamily units.
Ways to Start Investing in Multifamily Properties
Choose either Commercial or Residential
At this point, you need to know your limits on what nature of real estate you are willing to pursue. You should be able to decide whether you want to commit to commercial real estate or settle for a residential one. The most common choice in starting your multifamily property investment is investing in a larger unit or as small as a duplex property and renting it to generate income.
With most investments coming with risks, investing in a rental property can be very time-consuming as it requires you to be hands-on on your assets. While income in rental properties can be somewhat inconsistent, it can still be a profitable investment and help you build your wealth over time.
Be Opportunistic
This strategy is usually suited for the high rollers as opportunistic real estate investing is on a higher tier in terms of risk. But this risk comes with an equal level of potential returns. Investors who prefer this option would have to be hands-on on the projects as it requires you to perform the BRRRR method.
This method applies to any investment project, but it requires attention and due diligence to pull off a deal when an opportunity presents itself. It’s essential to find the right properties whether they are for sale or for refinancing. Here is a list of opportunities that investors can focus on.
- Add value to the property by making significant renovations or lease-up
- Assembling multiple parcels of land
- Purchase tracts of land
- Re-envision the property
Set up a Real Estate Crowdfunding
One of the newest types of real estate investment is setting up crowdfunding to raise additional capital. This type of investment is relatively new but shows a lot of promise in terms of potentials returns. Investors usually pursue this kind of investment practice by renting properties for five years before selling the properties for double the original price.
Although this type of investment relies on a platform to connect with your investors, it is generally still a high-risk type of investment. Given that all investment types have their own risk, this type of investment could be well-justified because of its potential returns.
Invest in Multifamily Properties with Us
Learning the basics of investing in multifamily real estate property will help you decide which strategy would be most effective for you. Doing so would allow you to prepare for any potential setbacks and make the necessary preparation before starting your investment journey. Contact a trusted partner to prepare you before venturing into the world of multifamily properties. Contact us today to guide you with your real estate journey.
