How to get started with built to rent multi-family

Question

I am in the Fayetteville area looking to build my first multifamily property to rent. I have no experience with building and I am looking for some insight on how to get started.

Todd Anderson · Answer

@Caleb Kight,

Welcome to the BP community.  I should be able to find many ways to learn here.

With having no experience in this space the best way to start is to partner with someone with the experience.  When I talk with other investors that are looking into this for the first time most get stopped by the financing requirements.  Most lenders that i have worked with will not look at the project if you haven't done at least 5 builds.

When you consider all things involved if the development process I believe that working with an experience builder and coming in at the end with long term financing is a much better and safer way.

I have been working with a number of contractors lately in a number of different markets.  I let the builder take care of all the work and construction financing and am happy to get a Build to Rent property after the investment has received the CO.  We then get the PM involved and many times have a tenant lined up with in 2 weeks of closing.  This allows the investor to get a return on the investment within the first month.

Please let me know if I can help more.

Best of luck.

Mohammed Rahman · Answer

If you’re starting from zero experience, you’ll want to break this into three main steps: planning, assembling the right team, and securing financing.

First, start with research and feasibility. Look at zoning rules in Fayetteville to make sure your lot allows multifamily.

You can check the city’s zoning map online or call the planning department. While you’re doing that, run some basic numbers — what rents in the area look like, your projected construction costs, and what your mortgage and operating expenses might be — to see if the deal makes sense.

Second, build your team early. At minimum you’ll need an architect (to design plans that meet code), a general contractor (to build), and potentially a civil engineer (if there’s grading, utilities, or drainage work).

If you’ve never built before, finding a GC with multifamily experience is huge — they can help navigate permitting and inspections.

Third, line up financing. This could be a construction loan from a local bank or credit union, possibly combined with permanent financing once the building is leased up.

Lenders will want detailed plans, permits, and a budget before approval, so having your design and cost estimates ready is key.

In short — confirm zoning and feasibility, get an architect and experienced GC on board, and work with a lender familiar with new construction in Fayetteville. From there, you’ll go through design, permitting, construction, lease-up, and then either refinance or hold.

Brannon Potts · Answer

You should find a trusted small builder in the area.  You need to know costs.  So you can determine what you can pay for the lots.They may ask for a plan to get the exact hard numbers.  Sometimes they will give a you close general number.  You would also need to start a search for multifamily zoned lots.  I use the metric of $15-20K per door. That has worked for me when building small multifamily.  Each community has costs for Lot and Lot development with impact and utility fees.  You would want to know what they are in your area.  My lot and lot development is below 15% and sometimes closer to 10% of total completed construction of a project. That includes both the lot purchase, closing cost for the purchase, impact fees, clearing the lot for the pad for construction, and any things need to prep the lot to start the foundation.  I have taught a video series with this on one of my single family builds recently and also have built several small multifamily construction with a new one coming in the next 9 months where I will do a video series with costs. My channel is B2R Investing and Financial talk if you are interested.Build to Rent Build Series

Ezekiel Trevino · Answer

Make friends with contractors. Also make some friends with real estate agents and property managers. Real agents and property managers might have a of list of people including contractors. They can also can help you find land and the property managers can help you manage the property. Or you could just Googe sreach contractor/ builder near your area. Look at the reviews, if they have good reviews contact them and get an estimate.

Ericka Williams · Answer

finding land will be the most complicated part in this area. There are lot of smaller builders in the area. You will have to work with a licensed GC. Would love to hear more of your plans or area you are looking into building in. build to rent is financially the best way to go. My family has 40 rentals in the area and prices are a little high at the moment.

Jennifer Rivera · Answer

Hey Caleb! -- Fayetteville property manager and investor here - jumping into your first multifamily is exciting but definitely a learning curve. One thing I learned the hard way is to always check zoning and any HOA or deed/covenant restrictions first. Some lots look perfect on paper but won’t actually allow multifamily, so that’s a must before you get too far.

Also, vet your contractors like crazy. Don’t just go with the cheapest bid. Make sure they’re licensed, insured, have real references, and have actually built multifamily before. A bad contractor can blow timelines and budgets fast. Keep in mind permitting here is a pain in the butt and they have been cracking down a lot on EVERYTHING.

From experience, it really helps to line up a good local lender, engineer, and GC early — it makes everything way smoother. If you want, I’m happy to share my local lender contacts here.

James Jones · Answer

Jennifer, this is spot-on advice. Zoning and permitting can make or break a multifamily deal long before you ever swing a hammer, and most new investors don’t realize how many “perfect” lots get eliminated once you read the fine print.

And you’re absolutely right on contractors. The cheapest bid usually becomes the most expensive mistake once timelines blow up. I’ve learned the hard way that experience with multifamily specifically matters far more than price.

Lining up the right local team early, lender, engineer, GC, turns the entire process from chaos into a controlled project. Great breakdown here.

James Jones · Answer

Caleb, great question, and built-to-rent (BTR) is one of the strongest long-term plays if you structure it right.

Since you’re in Fayetteville, you’re actually in a market where BTR can work extremely well because the rents are stable, population is growing, and land is still relatively affordable compared to the big metros. But here’s the order you want to follow so you don’t burn time or money:

1. Start with zoning, not construction.
Before you even think about architects or builders, call the city planning office and confirm:
• What zoning is required for multifamily/BTR
• Minimum lot size
• Density limits
• Parking/utility requirements
Half the battle is just knowing what the land allows.

2. Talk to a civil engineer early.
They’ll tell you how many units realistically fit on a parcel. Most beginners skip this step and lose months.

3. Build your “triangle team”:
• Civil engineer
• Architect
• General contractor
These three will determine 95 percent of your outcome. Interview more than one, the price and scope varies wildly.

4. Get rental comps + construction costs locked first.
BTR is a math problem before it’s a construction project. You want:
• True rent comps
• A real GC bid (not a “range”)
• Utility tap fees
• Site prep estimates
These will tell you if the deal even pencils.

5. Finance options to consider:
• Local banks (best for BTR)
• DSCR lenders for long-term takeout
• Construction-to-perm loans
Start conversations now, lenders love being looped in early.

6. Start smaller if you need to.
A duplex, fourplex, or two side-by-side duplexes is a perfect first BTR project. You learn the process without the pressure of a full 20-unit development.

Ryan Arth · Answer

@Caleb Kight As others have said, aligning with people who have done this before is usually the way to have the greatest chance of success. Personally, I think that value add multifamily will pencil over that built from scratch, but I don't know your area. In SFR, there is such demand from owner occupiers that the psf cost makes it such that you can build for less (with efficient design and the right dirt).

Your area may be different, where building small MF can be done for less than the cost of buying and upgrading existing.

It wasn't clear if you were talking about GCing your own build or hiring it out. With the right team of outsourced professionals and a high enough net worth to be financed, you should be able to find financing. If a bank says that you are lacking anything, find a partner who has what you lack.

Sandi Harris · Answer

@Caleb Kight This is what I build in central Texas (as an APM for contractor/developer). You should find a developer with the land, and rough plans already drawn, maybe even permits already approved. who is looking to sell or needs a contractor. You need to find a contractor too, with experience and good reputation. You'll also need financing via a bank lender, and equity partners. Consider getting a consultant if you can afford it to help with the development process. Feel free to reach out if you need specific construction advice!

How to get started with built to rent multi-family

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