Multifamily Rentals in Lincoln Nebraska

8 Replies

Hello Bigger Pockets and hello Lincoln, Nebraska!

I am on an 18 month contract for a local hospital, I am an Instructional Designer and curriculum developer.  I live in Portland, OR but I am in Lincoln 4 days a week and would like to purchase and possibly live in a multifamily here during my contract.  After my contract ends I would like to continue holding this property and rent it out.  

I would prefer a 3-4 plex but am open to duplexes also, I am not opposed to lower income housing and properties that need some love. 

I am new to real estate but I would love to offer help to any investor in the area.  I am aware and plan to attend the next Investor meeting at the Grata lounge at the Clocktower Plaza on the second Monday of every month at 7 pm.  If anyone has any other suggestions please let me know and if anyone wants to chat and have a coffee please reach out!

Hi Todd, Welcome to Lincoln.  Depending on what you are looking for there are options here.  If you want something inexpensive that cash flows really well but probably will need some work check out the old large house conversions around downtown.  They are typically the old mansion type homes that were great houses in their prime, but have since been converted to 3-5 plex type buildings.  It seems like they are always popping up on the market and there isn't a lot of interest in them.

We also obviously have purpose built duplexs, 4 plexes etc...around.  Less renovation and maintenance involved with those -typically - but they don't cash flow as much.  Hope this helps.  I'm a realtor also so if you need help looking for something let me know!

Lincoln isn't very big, but is there a certain area that you're looking to stay in?  I.E. close to your job?

Welcome @Todd Franklin ! Multifamily is overpriced in Lincoln right now and has been for awhile (but who knows, might look like a steal compared to Portland). Brian's right in that conversions will go for a better price but you're going to have a lot more maintenance issues and capex (replace plumbing, electrical, HVAC, etc) potentially. Lincoln has a strong rental market due to a high college student population among other things.

Thank you all for the welcome!  @Lance A White I honestly don't know the area enough to have narrowed it down yet. 

@Stephen Anthony , I figured the student population helps the rental market here and you are correct, it is all much cheaper than Portland!

@Brian Egr thanks for the tips, I will take a closer look at conversions!

@Stephen Anthony What makes you say MF is overvalued in Lincoln right now? What are the metrics now and what should they be when "normally" valued?

@Greg W. 9-10% caps 5 years ago to 4-5% caps now. Thousands of new construction units the last couple years. Now what's normal or what are they intrinsically value? I can't answer that, markets are always on the move, and I don't have a view of Lincoln over the past 30+ years.

Lincoln MF is higher priced than Omaha and I believe some other nearby similar Midwestern markets, though again I don't have a clear view on that.

Thank you for the information on the cap rates. 4-5% isn't terribly enticing. Are you talking about larger MF, duplex/triplex or all of the above?

There seems to be a lot of house conversions in the downtown area of Lincoln that are bought and sold frequently. 

I haven't run numbers on duplexes or triplexes in a long while. Yeah you'll see more conversions because there's a lot of them, especially in the Near South neighborhood, and they have better numbers on paper. Have to factor higher capex and maintenance than purpose-built MF.

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