What is a multiunit property?
The three main types of properties real estate investors choose are change to residential and commercial properties.
As the names suggest, single-unit properties have a single unit to rent, and multi-unit properties have more than one rentable unit.
Property types include:
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- Duplexes
- Apartment complexes
- Condominiums
- Townhouses
- Student housing
- Low-income housing
- Retail spaces or shopping malls
- Office buildings
- Warehouses
- Mixed-use developments with residential and consumer spaces
- Single family residences
- Single Tenant commercial buildings
- Multifamily units
- Mixed Use Properties
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New investors often may choose a single-unit property at first to try it out. But if you’re committed to the benefits of investing in property with multiple units, there’s no reason why you couldn’t start with this type of property.
In fact, you probably will end up investing in both types of properties at some point to diversify your investment portfolio.
Why you should invest in a multiunit property
It’s true that multiunit properties take a lot of work.
But the main reason this type of investment is so popular is because you can significantly boost your monthly income and balance your overall investment risks.
For instance, if you’re also investing in the stock market, you understand the considerable risks you are taking. By investing in real estate as well, you are balancing this risk with a consistent source of monthly income from your properties.
On the other hand, borrowers who only invest in single-unit properties leave themselves vulnerable to income gaps if they are unable to fill a unit for a period of time. Properties with multiple units are truly the perfect balance to your investment portfolio.
Additional benefits to investing in properties with multiple units include:
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- Easy to finance, because the right lender understands multiple units will bring in consistent cash
- You have a good reason to hire a property manager to help you manage your daily operations
- Over time, these properties can grow significantly in value
- Multiunits provide tax benefits to offset costs
- You can move into one of your own units to cut back on mortgage or rental costs
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The key to successful multiunit investing is having the right team of experts to help you.
Put together an experienced team who fully understands the common mistakes new investors can make — and has even made plenty of them on their own early in their career so you don’t have to.
Who should be on your real estate investment team?
Your team of professionals can help you through the entire process of choosing a property and evaluating purchase prices, short and long-term costs, and rental estimates.
This team might include the following experts:
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- Broker
- Attorney
- Local real estate agent
- Private money lender
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Real estate agents and brokers will have local insight to help you look for properties that match your criteria. They will assist with negotiations with sellers, guide you through all necessary paperwork, and keep you informed of all requirements through to closing.
It can be difficult, and sometimes impossible, for investors to find consistent financing for their multi-unit investments. Traditional lenders have strict documentation requirements, and limits on the number of properties they can fund.
A private money lender is typically an individual or funding group that has the freedom to make deals based on common sense and years of industry experience.
How to buy a multiunit property
If you’re ready to move forward and create your team, your first step should be to connect with a reputable, trustworthy hard money lender to discuss your deal and ask questions about the borrowing process.
Unlike traditional lenders, hard money lenders are interested in building a real relationship with borrowers for long-term success. These lenders want to be the person you come back to deal after deal for simple, flexible, fast financing that’s mutually beneficial.
Marquee Funding Group is a tight-knit, highly trained team of hard money lending experts who want to help you achieve your multi-unit investment goals.
We offer:
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- Same-day approvals
- Common-sense underwriting
- Closing in as fast as seven days
- Broad and flexible lending guidelines
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We provide a wide range of loan options for consumer or business purposes, including single-family, multi-family, commercial, industrial, and land. Our loan amounts range from $50,000 to $20 million. Don’t worry about the complexity or uniqueness of your deal — submit your loan scenario to our team today for review.