Updated about 2 months ago on 02/25/2026. Most recent reply

Liam DavisPoster

Seeking Advice on My First Multifamily Investment

Posted February 21, 2026 14:31

Hello everyone!

My name is Liam. I’m 23 years old and currently looking to make my first multifamily real estate investment. I’m very new to BiggerPockets and was encouraged by a friend to join. Even in the early stages of exploring the site, I’ve already found a lot of valuable experiences, insights, and resources, which motivated me to reach out to the community.

I wanted to post here in hopes of gaining advice, direction, or general insight from those who have experience in this space.

Based on my initial research, I believe I’d like to invest in a multifamily property, ideally a quadruplex. While I’m still flexible on the exact location, I would prefer something within reasonable distance of New York City, since I currently live here and would like to be able to reach the property relatively easily if needed.

In terms of tenant profile, I’m particularly interested in areas near student housing for colleges or young working professionals. From what I’ve learned so far, these areas may offer more consistent rental demand due to tenant turnover and steady population inflow, such as incoming students each year or growing job markets.

I have a solid base of savings to invest and am continuing to build capital while I refine my plan. I am still working through the full financial picture, including property taxes, mortgage costs, insurance, maintenance, and potential renovations, which I expect will vary depending on the market I ultimately choose.

At this stage, I am mainly looking for guidance on what I should be evaluating before making my first purchase and how to think about narrowing down the right location.

I would truly appreciate any advice, lessons learned, or experiences that members here would be willing to share.

Thank you very much for your time and insight.

Best regards,
Liam Davis

New York City, New York

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Drew Sygit

Property Manager
Royal Oak, MI

Drew Sygit

Property Manager
Royal Oak, MI

Replied February 22, 2026 06:06

Quote from @Liam Davis:

Hello everyone!

I wanted to post here in hopes of gaining advice, direction, or general insight from those who have experience in this space.

At this stage, I am mainly looking for guidance on what I should be evaluating before making my first purchase and how to think about narrowing down the right location.

I would truly appreciate any advice, lessons learned, or experiences that members here would be willing to share.

Thank you very much for your time and insight.

Best regards,
Liam Davis

You’re ALWAYS better off investing locally, where it’s easier to:

Learn the market
Network to find deals
Network to find contractors
Be more hands-on
Driveby property to keep tabs on it
Network to find a decent Property Management Company (PMC)

Next best location is somewhere else you lived, where you have an existing network of family & friends to help you as accomplish the above list as needed.

If you invest OOS, your biggest challenge won't be finding properties to meet your goals on paper, it’ll be successfully outsourcing all of the above.

The biggest mistake we see OOS investors making in our market, over and over again, is not fully understanding Neighborhood/Property/Tenant Classes and how they impact your probability of success!

They all run their ROI numbers assuming Class A results – when buying Class B, C & even D rentals.

Then they’re shocked when their performance expectations aren't met😞

If you choose to invest OOS, and have little to no landlord experience, we highly recommend targeting Class B Neighborhoods/Properties/Tenants. If you target Class C, you better be prepared emotionally & financially for plenty of challenges.

You can find Class B properties in the Midwest to BRRRR, but it will take more digging and YOU will need to understand how to analyze & identify them - because a lot of agents, wholesalers, PMCs, etc. will try to sell you Class C or D misrepresented as Class B:

Many of them don't know/care what Class the properties are, so they're incompetent.
Others know exactly what they are doing, so should be labeled as crooks!
EITHER WAY YOU LOSE!

Why is Property Class so important for investors to understand and apply in their investing strategies?

Because the Property Class dictates the Class of the tenant pool that the property will attract.

The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.

Both Property Class and Tenant Class will affect what type of contractors, handymen and property management companies you should target and be willing to deal with a property.

The Property Class will also impact the maintenance & renovations you do to, “Maintain to the Neighborhood”.

Why is that important?

Well, if you buy & renovate a property in Class D area to Class A standards, what Tenant Class will actually rent it?

Or, if you put several Class D tenants in a Class A four-plex, what do you think will happen to the property?

So, if you fail to apply the correct assumptions to a property, your expectations won’t be met, and it may even be a financial disaster.

We use the following to rank Property Classes, in order of importance:

Property Tenant Pool: closely linked to location, but not always.
Property Location: closely linked to tenant pool, but not always.
Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”

Key metrics for each Property Class:

Class A Properties:
Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.
Tenant Default: 0-5% probability of eviction or early lease termination.
Section 8: Class A rents are too high and won’t be approved.
Vacancies: 5-10%, depending on market conditions.
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.

Class B Properties:
Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.
Tenant Default: 5-10% probability of eviction or early lease termination.
Vacancies: 10-15%, depending on market conditions.
Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.
Section 8: Class B rents are usually too high for the Section 8 program.

Class C Properties:
Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability.
Tenant Default: 10-20% probability of eviction or early lease termination.
Section 8: Class C rents usually meet program requirements, proper screening still recommended.
Vacancies: 10-20%, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.

Class D Properties:
Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.
Tenant Default: 20-30% probability of eviction or early lease termination.
Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.
Vacancies: 20%+, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.

Where did we get our FICO credit score information from?

Check out this chart:

FICO Score	Pct of Population	Default Probability
800 or more	13.00%	1.00%
750-799	27.00%	1.00%
700-749	18.00%	4.40%
650-699	15.00%	8.90%
600-649	12.00%	15.80%
550-599	8.00%	22.50%
500-549	5.00%	28.40%
Less than 499	2.00%	41.00%