Starting in Multi-Family Properties

3 Replies

I'm a 21 year old college student who has over the past year become very interesting in owning multi-family properties. I've seen many different opinions on this topic and have struggled to come to a conclusion; is it best to start with a large property (15+ units) or begin with a small du/tri/fourplex? At what point does it become necessary to hire a property manager?

Thanks!

Hi Andrew, 

To start out with a commercial building you are most likely going to need a lot capital for down payment.  Of course there are always exceptions, such as owner financing. which may allow you to put down less than 25%.  

As far as property management, it depends on if you want to manage yourself or want your investment to be a little more passive.  Personally I like to manage myself but other people do not want to be bothered or do not have the time.  Another factor is the location.  If it is out of state, the property may require a property manager. 

Originally posted by @Chris Puglisi :

Hi Andrew, 

To start out with a commercial building you are most likely going to need a lot capital for down payment.  Of course there are always exceptions, such as owner financing. which may allow you to put down less than 25%.  

As far as property management, it depends on if you want to manage yourself or want your investment to be a little more passive.  Personally I like to manage myself but other people do not want to be bothered or do not have the time.  Another factor is the location.  If it is out of state, the property may require a property manager. 

 Hi Chris,

Thank you for the advice! Do you have any recommendations on how to find the right property manager? Also, in regards to the capital I was planning on collecting money from investors for the down payment (family, friends, etc). Thanks again!

Starting with a 15+ apartment will catapult you to larger deals faster if you can get the 15 unit purchased. You will need a down payment of 20-30% and will likely need a loan sponsor if you have no experience and little money. Starting with a 2-4 unit will be much easier and probably a great idea, especially if you are willing to live in a unit. 

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