Buying 2-4 Units when there are big Apartments Nearby

Omaha, Nebraska
Multi-Family and Apartment Investing
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Buying 2-4 Units when there are big Apartments Nearby

Rick Albert
Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes

Hello!

I am looking into some new markets to invest in. I typically buy 2-4 unit properties. The challenge I'm seeing is the development/existence of all the larger apartment complexes near these properties. As a smaller property, I can't compete except for price. 

Am I missing something? Any guidance would be appreciated.

Thank you BP Community!

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Frank PyleBusiness Member
Specialist · USA · Member since 2024 · 280 posts · 130 votes
10mo

You are not missing it but you are also not doomed. In Omaha the 2 to 4s can still win if they are in the right pocket, have better unit layouts, parking, yards, less noise, and you can run them like a clean quiet small community instead of a churn factory.

The big complexes usually set the floor on concessions and amenities, but they also have fees, stricter rules, and a lot of turnover. Your edge is targeting renters who want a simple place with a real person landlord, quick maintenance, and no junk fees. I would underwrite with whatever the closest big complex is actually getting after concessions, then stress test your rents a bit lower and see if the deal still works.

What parts of Omaha are you looking at and are you house hacking or buying as a straight rental? If you share a purchase price range and expected rents I can sanity check the numbers against what those nearby complexes are really doing.

[email protected]317-501-3467
Frank Pyle at ExP Realty
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  • Frank PyleBusiness Member
    Specialist · USA · Member since 2024 · 280 posts · 130 votes
    10mo

    You are not missing it but you are also not doomed. In Omaha the 2 to 4s can still win if they are in the right pocket, have better unit layouts, parking, yards, less noise, and you can run them like a clean quiet small community instead of a churn factory.

    The big complexes usually set the floor on concessions and amenities, but they also have fees, stricter rules, and a lot of turnover. Your edge is targeting renters who want a simple place with a real person landlord, quick maintenance, and no junk fees. I would underwrite with whatever the closest big complex is actually getting after concessions, then stress test your rents a bit lower and see if the deal still works.

    What parts of Omaha are you looking at and are you house hacking or buying as a straight rental? If you share a purchase price range and expected rents I can sanity check the numbers against what those nearby complexes are really doing.

    [email protected]317-501-3467
    Frank Pyle at ExP Realty
    WebsiteView Page
    NEXA Lending- Investors Edge Concierge
    View Page
    5Reply
  • Josh C.Pro Member
    Property Manager · Indianapolis, IN · Member since 2010 · 1k+ posts · 1k+ votes
    10mo

    I’m in Indianapolis and for whatever reason we have a million duplexes so this issue is very common. It’s just a different tenant base IMO. They want a quieter place with a yard for their dog. If they want smaller yet newer places with gyms and dog washing stations they pick the big shiny new developments. Just two different people. We however have no issues filling duplexes and triplexes if priced correctly and again they super common here as we manage well over 100 duplexes. Plus they typically stay longer in duplexes than our 60 unit building leading to lower turnover costs.

    3Reply
  • Rick Albert
    OP
    Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    10mo

    This is all great feedback, thank you!

    This is a buy and hold, not a house hack. I'm open to location as long as no one gets shot. 

    0Reply
  • Christen G.
    Rental Property Investor · Seattle, WA · Member since 2017 · 387 posts · 249 votes
    10mo

    I have nothing unique to say as the guys above nailed it on the head - your advantage is being a 'mom and pop landlord' and not a big corporation. Tenants like that, seek it out and will stay long term if the rent is reasonable and you're responsive to maintenance issues. Best of luck.

    1Reply
  • Aaron ZimmermanBusiness Member
    Accountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
    10mo

    It really depends on the supply and demand dynamics of the local market. If there's a lot of supply of these amenity rich places, it may be tougher to rent out your unit.

    That said, if your market is anything like mine, we are drastically undersupplied and getting renters is easy. Also - only so many people can afford the cookie cutter apartments anyway as you're generally paying a higher price for amenities. 

    [email protected]
    Brick House CPAs54 Reviews
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    1Reply
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