Generally, multifamily real estate offers the steadiest rate of return for real estate investors. If you are looking to add a multifamily property to your portfolio in 2020, it can help you reduce your vacancy rates and boost your income. Moreover, multifamily properties can sometimes be easier to finance as lenders see them as low-risk investments. While they are an ideal choice for property investors, finding multifamily for sale is not very easy. Simply browsing your local listings won’t lead you to great multifamily real estate deals. You need to do a reasonable amount of research. Understanding how to find multifamily properties for sale can be the difference between making a smart investment and losing your money.
So, how can real estate investors effectively find multifamily homes for sale in 2020? This guide provides you with some pieces of advice to help you find the best multifamily for sale to add to your portfolio. Keep reading.
Related: What You Need to Know Before Buying Multifamily Homes for Investment
How to Find Multifamily for Sale
1. Hire an Experienced Real Estate Agent
If you are a beginner real estate investor looking to buy multifamily for sale, it’s advisable that you form a relationship with a local real estate agent. Realtors have expansive real estate networks which they can use to help you find lucrative multifamily investment deals. This includes off-market deals which usually have less competition. Moreover, working with a real estate agent will make your property search smoother. They will help you navigate through the process, including making an offer and negotiating deals.
The agent should have experience with multifamily properties. You can find a licensed real estate agent in the US by viewing agent profiles in Mashvisor’s Agent Directory.
Related: How to Find an Investor Friendly Real Estate Agent
2. Find the Best City
As you have heard many times before, location is the single most important factor in real estate investing. Where you live might not necessarily be the best market for multifamily investment. However, if you conduct thorough market research, you can find a profitable housing market elsewhere.
When looking for where to find multifamily properties for sale, you should pay attention to cities with features such as:
- Growing job market
- Low property taxes
- Favorable landlord-tenant laws
- Population growth
- Low crime rate
- Potential future developments
3. Find the Best Neighborhood
Once you have found an ideal city to invest in, it’s time to analyze the different neighborhoods in the city so as to find the best-performing one. While a city may be generally ideal for investing in multifamily for sale, the return potential varies from neighborhood to neighborhood.
You can perform a thorough neighborhood analysis using Mashvisor’s real estate heatmap. With this tool, you can find the best neighborhood to invest in real estate based on the following filters:
- Listing Price
- Rental Income (Traditional or Airbnb)
- Cash on Cash Return (Traditional or Airbnb)
- Airbnb Occupancy Rate
When you set any of these filters, the heatmap will show the performance of different neighborhoods in the city using a range of colors. The highest values are marked in green while the lowest values are marked in red. This way, you can easily identify the neighborhood with the most profitable features. With this tool, you’ll be sure to select the best multifamily markets, right down to the exact neighborhoods.
Mashvisor’s Real Estate Heatmap
Keep in mind that for you to use Mashvisor’s multifamily filter and evaluate neighborhoods with multifamily properties for sale only, you need to sign up for an Expert Plan.
In just a matter of minutes, you’ll know where to search for multifamily for sale. You now need to search for multifamily properties for sale in your neighborhood of choice that match your criteria.
Besides the heatmap, you’ll see a sidebar with multifamily listings in that neighborhood. Each property listing will have a small preview of the property analysis, which includes the cap rate (Airbnb and traditional) and the cash on cash return (Airbnb and traditional). Using Mashvisor’s Airbnb calculator will help computing the numbers on short-term rental properties a lot easier and faster.
4. Perform a Multifamily Investment Property Analysis
The next step is to analyze each multifamily for sale that you are interested in. A thorough multifamily investment property analysis will help you narrow down your options to the best multifamily for sale in the neighborhood.
From the listings shown, you can find one that best suits your investment goals and click on it. You will be directed to the Investment Property Analysis Page where you can interact with the Multifamily Investment Calculator. The calculator allows you to customize your investment property analysis by adjusting details such as property financing and rental expenses (one-time and recurring). This way, you will be able to get more accurate results.
The calculator makes it easier for you to find high cap rate multifamily for sale that generates positive cash flow since it provides you with estimates. After finding a few promising multifamilies for sale, you can now do in-depth research on them. This will save a lot of your time and effort in multifamily investment property analysis.
The multifamily investment calculator will give you data for the following metrics for every multifamily listing on the platform:
- Rental Income
- Rental Property Expenses
- Cash Flow
- Cap Rate
- Cash on Cash Return
- Occupancy Rate
Mashvisor’s Multifamily Investment Calculator
Furthermore, you can use the calculator to conduct a comparative market analysis for multifamily for sale you are analyzing. With just a click of the button, you will get the multifamily comps.
Related: Learn How to Evaluate Multifamily Investment Properties
Finding Off Market Multifamily for Sale
You don’t have to limit your search for multifamily for sale to what’s actively for sale. You can find profitable listings ahead of your competition by searching for off market properties. Off market deals can save you a lot of money because they are often priced below market value. This is because the homeowners are usually motivated to sell the property as fast as possible. Therefore, this type of multifamily for sale is often more affordable for real estate investors.
The best way to find off market multifamily for sale is through the Mashvisor Property Marketplace. With this tool, you can find off market properties such as short sales, foreclosures, auctioned homes, and bank-owned homes in the US housing market.
The Bottom Line
It’s no secret that multifamily for sale offers some of the best investment opportunities for real estate investors. If you stick to the strategies outlined above, finding profitable multifamily for sale should be an easy endeavor. Be sure to use Mashvisor’s investment property search tools to find the best multifamily homes for sale in the US.
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