Scaling from Two Rentals: Moving into Duplexes

[Wilmari Tejeda]

For those who scaled beyond their first couple of rentals:

What would you prioritize differently early on?

What mistakes should I avoid at this stage?

Any advice on financing, deal structure, or market focus when moving into small multifamily?

[Alan Asriants]

I typically try to buy properties that were built in at least the 1960s or 1970s. In most cases, if they need work, it’s more cosmetic than major capital expenditures. Unless, of course, the windows, the roof and HVAC has never been updated. Buying an older Philadelphia rowhome (built 1880-1940-)—especially a multifamily that hasn’t been fully gutted in the past 20–30 years—can quickly turn into a nightmare, and you may end up being the one holding the bag. This is because you'll likely be dealing with somebody who just patched up problems instead of properly rehabbing them. Things like plaster walls, hundred year old vent stacks, knob into wiring, etc. This can be REALLY expensive

I prioritize layout and functionality, along with the most important factor: location.

In the Philadelphia area, I’m consistently seeing better rental performance in the outskirts and surrounding counties compared to the city itself.

When analyzing a deal—especially in a hot area—it’s important to understand the potential of the property, not just what it’s producing today. Inventory is extremely limited, and many sellers are either tired landlords or owners who have mismanaged their properties. If you run your numbers strictly based on current performance, you’ll be disappointed by most of what’s on the market.

Finally, if you’re looking to buy a multifamily in a strong location, you need to be able to move fast. Most multifamily properties are still selling over asking price and often with no contingencies. Being proficient in understanding renovation costs and knowing what to look for during a walkthrough puts you in a much better position to budget accurately and decide whether a property is worth pursuing. I always try to point out as many potential issues as possible during walkthroughs so buyers fully understand what could go wrong.