Real estate investors invest in rental properties to build their portfolios and gain another source of reliable monthly income. A multi-family property is a common type investors choose and include anything from apartment buildings to office buildings and warehouses.
In this multi-family property guide, we will dig into the types of properties to invest in, pros and cons, and using a hard money loan for financing.
What is a multi-family property?
Multi-family properties are buildings with more than one separate, rentable space. Single-family properties, as the name suggests, only have one rentable unit.
Depending on the number of stories, units, and type of occupancy, multi-family properties can either be considered residential or commercial.
What’s your loan scenario?
Multi-family property types include:
- Apartment buildings
- Low-income or age-restricted housing
- Student housing
- Office buildings
- Retail spaces
- Industrial properties
- Mixed-use developments (apartments built next to retail shops, restaurants, etc.)
Investors looking to build a portfolio can do so quickly with these types of properties since they have multiple tenants.
A multi-family property is a popular investment choice because they bring in a consistent, strong cash flow every month. Multi-family housing such as apartment buildings is popular in states such as California and Colorado. These places have bustling cities and a high need for affordable housing.
Commercial multi-family properties such as retail spaces or industrial properties also suit these locations well, due to multiple-industry growth and a positive job outlook.
Pros and cons of a multi-family property
Multi-family properties offer many benefits. But it’s important to weigh the pros and cons to make sure this investment works for you and your goals.
Bigger upfront costs, but consistent monthly income
Single-family properties are much less expensive than multi-family, so newer investors sometimes opt to start with this type first.
However, multi-family properties can bring in significantly more cash every month with multiple tenants. And if a tenant leaves, you still have cash coming in every month from other tenants.
Most lease terms are yearly or every two years. This provides investors the opportunity to adjust monthly payments with inflation or market fluctuations.
More work to maintain, but can hire property managers with extra income
If you’re unprepared for the work that comes with maintaining a multi-family property, a single-family property may make more sense.
It wouldn’t make sense to hire a property manager for one or two single-family homes. With a multi-family property, you can make enough money each month to afford a property manager without cutting into your profit margins.
It all depends on your personal preferences:
- How involved you’d like to be in your properties
- The amount of money you hope to make
- How large of a portfolio you are seeking
Get a multi-family property with hard money
If our multi-family property guide has helped you decide that this property type matches your investment goals, you might wonder the best way to finance this property.
Financing a multi-family property is actually an easy decision for a lender because of the strong monthly cash flow. And a hard money lender can make the process much simpler than traditional lenders.
Marquee Funding Group, which serves 46 states, offers:
- Immediate review of your loan scenario
- Funding in as fast as seven days
- Quick application, document request, and underwriting
Hard money lending is a common choice for investors, because traditional lenders require too much “red tape” in the form of strict documentation and a long, timely process.
Hard money lending with Marquee Funding Group
What makes a hard money lender different from traditional lending? Hard money lenders are individuals or funding groups rather than banks.
They are far more interested in creating relationships with borrowers based on trust, honesty, and transparency — and they expect their borrowers to be just as honest and transparent throughout the process.
Marquee Funding Group is the ethical standard for hard money lenders in California and Colorado. We make our deals based on common sense and years of industry experience.
Marquee wants to do long-term business with investors, providing:
- Owner-occupied or non-owner-occupied consumer or business purpose loans
- Loan amounts from $50,000 to $20 million
- Multi-family, single-family, commercial, industrial, construction, and land loans
- Purchase money, rate-and-term refinance, and cash-out refinance options
- Loan-to-Value up to 70% (deal specific)