Transitioning from SFR Rentals to Multifamily - Things to Know

4 Replies

Hello BP!

I've been part of the investing and landlording world since 2014.  I've learned a lot but of course there is always much to learn.

I own 7 SFR rentals and am looking to scale, so I'm entertaining the idea of making the jump into some multifamily investing.

My properties are in North and South Carolina, and in C+/B- and better areas.  I'm looking to learn as much as I can about the differences between purchasing, owning, and managing multis and SFRs.  I've started to compile a list of what I know and don't know so far.  If anyone can offer suggestions, please chime in!

What I do know:

Look for properties with units separately metered for utilities.

Commercial financing applies to properties of more than 4 units.  Financing approval is based upon the income of the property instead of being based on your personal income.

Review leases of any tenants already in place.

What I don't know:

Does the law require an onsite manager for 5+ units?

Who typically handles lawn maintenance?

How are pre-purchase inspections handled and who performs them?

I'm sure there's a lot more that I've left out.  I'd love to hear what those of you experienced with multifamily have learned.

Thank you in advance.

@Jordan Little

Does the law require an onsite manager for 5+ units? Not that I know of.

Who typically handles lawn maintenance? Owner for multifamily.

How are pre-purchase inspections handled and who performs them? You would need to arrange these.

In the Columbia area, you do not need an on-site manager but you do have to have a responsible party within an hour or so of the property.  It is different in different towns but I seem to remember Cayce, for example, needing a contact person 75 miles or less from the property.  I cannot find the statute now but I think Columbia is a shorter distance.  Landlords cannot live in, say, New York without having someone here for tenants to contact if there are problems.