If you are wondering how to make money in real estate, then we suggest you start looking at multi family real estate for sale.
Finding multi family real estate for sale is a procedure that a real estate investor should not take lightly. Therefore, how do you find multi family homes for sale the right way?
In this blog, we are going to tell you exactly how to find multi family real estate for sale. For this, we are going to consider it as a rental property rather than a flip or a wholesale real estate deal.
Related: Learn How to Invest in Multifamily Homes for Sale
First of all, as a new real estate investor, you need to know what are multi family homes in real estate investing. Unlike single-family homes, multi family real estate properties are buildings with multiple residential units. There are, in fact, many different types of multi family properties such as apartment buildings as well as duplexes and quadruplexes. Therefore, whether you choose to buy a duplex or any other type of multi family properties, you should follow the right procedure.
Multi Family Real Estate for Sale: Create a plan
The first step towards any business at all is planning. In order for you to be able to act, you should set clear goals and objectives. So, your plan should include the following:
- Set your general criteria: When buying an investment property, the first thing you do is list the criteria you will use to buy the property. These criteria should include the size of the property, the number of units, the condition of the property in addition to the location.
- Set your financial criteria: Getting into a business requires, obviously, financing. It is also obvious that you should set your budget and stick to it as much as possible. Calculate any expected expenses and set a separate budget for any unexpected expenses as well.
Multi Family Real Estate for Sale: Pick a suitable strategy for financing rental properties
One more thing you should consider is the investment property financing strategy. Funding multi family properties requires more money. Thus, make sure to pick the right financing strategy. Moreover, your plan should include the down payment you intend on paying. Typically, an investment property mortgage lender will require a down payment of at least 20% for financing rental properties. Still, this does not mean that you won’t be able to find other lenders who require less.
We at Mashvisor recommend that you do not pay less than 20% in down payment. To understand why we recommend so, read our blog ” Why You Shouldn’t Put Less Than 20% Down Payment“.
Multi Family Real Estate for Sale: Find a real estate agent near you
The right people know where to find all the right deals. Finding a real estate agent would be of great help, especially if you are a new real estate investor. A real estate agent always has his/her own resources to find multi family real estate for sale. Not only that but they also know exactly what makes for the most profitable multi family properties.
One thing you will have to consider, though, is the commission a real estate agent charges. However, unless you are an experienced real estate investor, there is no other way to go about buying multi family real estate for sale without a real estate agent.
*Tip: When finding a real estate agent, it is better to find one near you. We say that because a real estate agent in your local area knows best about the housing market in that area. They also know all about local real estate market trends. To learn more about finding a local real estate agent, take a few minutes to read our blog “How to Find a Real Estate Agent Near Me?“
Multi Family Real Estate for Sale: Consider a foreclosed home for sale
Buying foreclosures might be one of the best investment opportunities in real estate. Foreclosure is a legal procedure towards homeowners who fail to pay the mortgage. Therefore, the lender takes over the property and sells it for a lower price to cover the mortgage. So in order for you to find the best multi family real estate for sale, check out foreclosure listings. However, this does not mean that you will always be able to find good foreclosure deals. There are pros and cons to foreclosures that you must take into account. For this purpose read our blogs “Real Estate Questions: Should I Buy a Foreclosed Home?” and “How to Buy a Foreclosure as an Investment Property“.
Multi Family Real Estate for Sale: Go for the investment property calculator
The investment property calculator is probably one of the best tools a real estate investor could ask for. This tool will spare you the pain of going through spreadsheets and manual calculations. The profitability of an investment property is a few clicks away. Basically what you do is provide it with the required data and it does the rest. Its calculations include the following:
The investment property analysis: No matter what types of real estate you intend on investing in, you will always be advised to perform an investment property analysis. This analysis will take care of all the real estate metrics that are important for the profitability of a property. Therefore, when looking for multi family real estate for sale, it is important that you conduct such analysis.
The real estate market analysis: The real estate market analysis is another type of analysis that you will have to perform. This type of real estate analysis focuses on the location, the market trends in addition to some predictive analysis. So, essentially, you compare your investment property to other similar ones in the same location. This comparison will help you find the best places to invest in real estate. Also, you get to determine whether the price you are paying for the property is worth the investment at all.
Related: Every Real Estate Investor Needs These Real Estate Analytics Tools
Finally,
Buying multi family real estate for sale takes some careful planning. It also takes knowing what you are stepping into before stepping into it. Make sure you do due diligence first and then take proper action. Moreover, you can check out Mashvisor’s investment property calculator and enjoy the best real estate investing experience.
To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here.