Convert 8 unit multifamily to MTRs

Toledo, OH · Member since 2022 · 46 posts · 26 votes

I am looking to connect with individuals or groups that have taken an 8+ multifamily apartment building and turned the units into MTRs. We are in the process of turning one of our units in our 12 unit apartment building into a MTR. I am looking to hear other peoples stories and strategies. Are you guys turning all the units into MTRs or just a few? Who has sublet to others to let them do the MTR strategy? If you are subletting, do you charge a premium on the the rent? What else would you like to share?

There is another owner of a 8 unit building that is looking to do the same and we might be helping him get started as well. Trying to learn more before we jump in. Thanks in advance.

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Conner Olsen

Real Estate Agent · Austin, TX · Member since 2020 · 1k+ posts · 941 votes

Quote from @Eric Puffenberger:

There is another owner of a 8 unit building that is looking to do the same and we might be helping him get started as well. Trying to learn more before we jump in. Thanks in advance.

I was hoping to do that as well in Austin. I wanted to do a BRRRR and with the higher NOI from MTR I thought I could pull it off. I asked a commercial appraiser and they said the cap rate would probably be higher and the total value of the building would be close to what LTR would be. If you are wanting to do a BRRRR on the property you might want to rent to people doing the arbitrage model so it's still LTR on your end.

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Allen DuanPro Member
Property Manager · Los Angeles, CA · Member since 2022 · 590 posts · 463 votes
3y
Hi Eric,
I love this idea! This is one of my long term goals, to purchase a small apartment building and set up a portion of units as MTRs. I'd love to hear how your project goes. I figure you can set up as many units as MTRs as your market has demand for. You also have the ability to diversify your units with the steady LTR rents helping with vacancies for the MTR units. Super exciting just thinking about it!
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Eric PuffenbergerBusiness Member
OP
Toledo, OH · Member since 2022 · 46 posts · 26 votes
3y
@Allen Duan We can definitely stay in touch. I sent you a message. Our goal is to have ours up and running by the end of this week.
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James Likis
Investor · Boston, MA · Member since 2019 · 47 posts · 22 votes
3y
@Eric Puffenberger I'd also love to hear how this shift to MTRs goes for you and learn from your experience! Have you been able to connect with anyone else doing the same shift in the multifamily space? Like @Allen Duan, we have the same long term goal.
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Eric PuffenbergerBusiness Member
OP
Toledo, OH · Member since 2022 · 46 posts · 26 votes
3y
Quote from @James Likis:

@Eric Puffenberger I'd also love to hear how this shift to MTRs goes for you and learn from your experience! Have you been able to connect with anyone else doing the same shift in the multifamily space? Like @Allen Duan, we have the same long term goal.
Allen is the only person I’ve connected with. We are really close to launching it. I’ll post some
pictures of the unit and the building itself. We will see how it goes! Wish us luck lol.
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James Likis
Investor · Boston, MA · Member since 2019 · 47 posts · 22 votes
3y
Fully rooting for you!
0 Reply
Ericka Luddy
Investor · Dallas, TX · Member since 2023 · 7 posts · 5 votes
3y
Love this! Would love to do this in our market as we are currently rental arbitrage. Goodluck and keep us posted on your progress!
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Eric PuffenbergerBusiness Member
OP
Toledo, OH · Member since 2022 · 46 posts · 26 votes
3y
Final pictures
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Eric PuffenbergerBusiness Member
OP
Toledo, OH · Member since 2022 · 46 posts · 26 votes
3y
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Nicole Heasley Beitenman
Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes
3y
Do you already have some experience in the MTR market? I'd be hesitant to dive in with that many units at once until I knew the market could support it. Otherwise, I hope it works out great! Please keep us posted!!
1 Reply
Conner Olsen
Real Estate Agent · Austin, TX · Member since 2020 · 1k+ posts · 941 votes
3y
Quote from @Eric Puffenberger:

I am looking to connect with individuals or groups that have taken an 8+ multifamily apartment building and turned the units into MTRs. We are in the process of turning one of our units in our 12 unit apartment building into a MTR. I am looking to hear other peoples stories and strategies. Are you guys turning all the units into MTRs or just a few? Who has sublet to others to let them do the MTR strategy? If you are subletting, do you charge a premium on the the rent? What else would you like to share?
There is another owner of a 8 unit building that is looking to do the same and we might be helping him get started as well. Trying to learn more before we jump in. Thanks in advance.

I was hoping to do that as well in Austin. I wanted to do a BRRRR and with the higher NOI from MTR I thought I could pull it off. I asked a commercial appraiser and they said the cap rate would probably be higher and the total value of the building would be close to what LTR would be. If you are wanting to do a BRRRR on the property you might want to rent to people doing the arbitrage model so it's still LTR on your end.
1 Reply
Yael Fuerst
Hallandale, FL · Member since 2016 · 45 posts · 9 votes
3y
Hi @Eric Puffenberger would love to hear how the MTR route is going, were you able to find tenants? If yes, how long did it take. My main concern with MTRs is the timeframe from start to getting a contract signed.
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Eric PuffenbergerBusiness Member
OP
Toledo, OH · Member since 2022 · 46 posts · 26 votes
3y
Quote from @Yael Fuerst:

Hi @Eric Puffenberger would love to hear how the MTR route is going, were you able to find tenants? If yes, how long did it take. My main concern with MTRs is the timeframe from start to getting a contract signed.
We got our MTR all set up and put it on furnished finder. We had several good applicants. We ended up renting it to a family member who was on hard times. She just finished up her term and we are cleaning/turning it this week.

This unit was a bottom garden unit. We are thinking it would have been better to list a top unit but we will see how round two goes.

Our timeframe from setup to renting was about a month but that was just me and my wife doing it on the weekends. We could have had a tenant from FF right away
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Yael Fuerst
Hallandale, FL · Member since 2016 · 45 posts · 9 votes
3y
Thank you @Eric Puffenberger this sounds pretty good to me. Just have to make sure I'm not in an over saturated market....also I don't live in the US so it will prob take me longer to set this up but I'm excited to try it.
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Robin SimonBusiness Member
Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
3y
Quote from @Eric Puffenberger:

Quote from @Yael Fuerst:

Hi @Eric Puffenberger would love to hear how the MTR route is going, were you able to find tenants? If yes, how long did it take. My main concern with MTRs is the timeframe from start to getting a contract signed.

We got our MTR all set up and put it on furnished finder. We had several good applicants. We ended up renting it to a family member who was on hard times. She just finished up her term and we are cleaning/turning it this week.

This unit was a bottom garden unit. We are thinking it would have been better to list a top unit but we will see how round two goes.

Our timeframe from setup to renting was about a month but that was just me and my wife doing it on the weekends. We could have had a tenant from FF right away

sounds like a successful strategy, think this is going to become more and more common
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Jordan MoorheadBusiness Member
Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
3y
We actually found an 8 unit in San Antonio that would work great for this
[email protected]512-888-9122
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Bonnie LowPro Member
Lender · Asheville, NC · Member since 2016 · 1k+ posts · 1k+ votes
3y
Looking forward to hearing how this works out for you, particularly if you're getting the occupancy rates you project in your underwriting.
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Jamie Banks
Real Estate Consultant · Reston, VA · Member since 2022 · 513 posts · 521 votes
3y
Looks great, I wish you all the best!
Do you plan to self manage the 8 units?
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Jeremy Rosen
Property Manager · San Antonio, TX · Member since 2021 · 54 posts · 29 votes
3y
@Eric Puffenberger have you looked at FurnishedFinder.com/stats for your market to see what the demand is and how much people are typically paying for MTR? As far as subletting a property, I imagine you're referring to the arbitrage model? I've arbitraged for STR before, but I think the margins are too slim to arbitrage for MTR, however it's less work so perhaps it could work at scale to cash flow.
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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
3y
@Eric Puffenberger
Have you done a detailed market analysis to determine if there is this type of demand ?
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Eric PuffenbergerBusiness Member
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Toledo, OH · Member since 2022 · 46 posts · 26 votes
3y
Quote from @Chris Seveney:

@Eric Puffenberger
Have you done a detailed market analysis to determine if there is this type of demand ?
Furnished finder sends us data on the number of people who have searched for Rossford. They also send us leads that we can follow up with. Looking at those numbers, I’m confident we will get plenty of applicants. We don’t have it listed at moment as we are transitioning to another unit (moving it from first floor to top floor)
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Mark F.
Rental Property Investor · Northern NJ · Member since 2019 · 672 posts · 677 votes
3y

You're not only listing on FF, right? I'd list on Airbnb and Zillow as well since they're free. Plus Zollow publishes on Hotpads and another website that escapes me at the moment.

I'm also of the mindset that at that size apartment building, I'd try one unit at a time for MTR. You may find a sweet spot with managing time wise or slowly build up your systems and knowledge about what works and what doesn't. Good luck!
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Sam McCormackBusiness Member
Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
3y
Quote from @Allen Duan:

Hi Eric,
I love this idea! This is one of my long term goals, to purchase a small apartment building and set up a portion of units as MTRs. I'd love to hear how your project goes. I figure you can set up as many units as MTRs as your market has demand for. You also have the ability to diversify your units with the steady LTR rents helping with vacancies for the MTR units. Super exciting just thinking about it!

Hi Allen, I actually have an LTR 6 unit I am looking at that we are trying to turn a few units to MTR. It is directly across the street from a huge hospital. I didn't know that was this popular with others. Are you interested in it? Cincinnati is the most popular city in OH for traveling nurses!
[email protected]859-443-4952
Sam McCormack Realtor
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Allen DuanPro Member
Property Manager · Los Angeles, CA · Member since 2022 · 590 posts · 463 votes
3y
Quote from @Sam McCormack:

Quote from @Allen Duan:

Hi Eric,

I love this idea! This is one of my long term goals, to purchase a small apartment building and set up a portion of units as MTRs. I'd love to hear how your project goes. I figure you can set up as many units as MTRs as your market has demand for. You also have the ability to diversify your units with the steady LTR rents helping with vacancies for the MTR units. Super exciting just thinking about it!

Hi Allen, I actually have an LTR 6 unit I am looking at that we are trying to turn a few units to MTR. It is directly across the street from a huge hospital. I didn't know that was this popular with others. Are you interested in it? Cincinnati is the most popular city in OH for traveling nurses!

Hi Sam, sounds like a great idea. Are you looking for a buyer or a property manager?
0 Reply
Sam McCormackBusiness Member
Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
3y
Quote from @Allen Duan:

Quote from @Sam McCormack:

Quote from @Allen Duan:

Hi Eric,

I love this idea! This is one of my long term goals, to purchase a small apartment building and set up a portion of units as MTRs. I'd love to hear how your project goes. I figure you can set up as many units as MTRs as your market has demand for. You also have the ability to diversify your units with the steady LTR rents helping with vacancies for the MTR units. Super exciting just thinking about it!

Hi Allen, I actually have an LTR 6 unit I am looking at that we are trying to turn a few units to MTR. It is directly across the street from a huge hospital. I didn't know that was this popular with others. Are you interested in it? Cincinnati is the most popular city in OH for traveling nurses!

Hi Sam, sounds like a great idea. Are you looking for a buyer or a property manager?

Hi Allen, I am good on a PM! But I am lacking where a buyer should be. Traveling nurses would do great here, it is directly across the street, walkable, and good road. I had someone looking but he was nervous by the MTR. But my MTR PM loves it
[email protected]859-443-4952
Sam McCormack Realtor
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Allen DuanPro Member
Property Manager · Los Angeles, CA · Member since 2022 · 590 posts · 463 votes
3y
Quote from @Sam McCormack:

Quote from @Allen Duan:

Quote from @Sam McCormack:

Quote from @Allen Duan:

Hi Eric,

I love this idea! This is one of my long term goals, to purchase a small apartment building and set up a portion of units as MTRs. I'd love to hear how your project goes. I figure you can set up as many units as MTRs as your market has demand for. You also have the ability to diversify your units with the steady LTR rents helping with vacancies for the MTR units. Super exciting just thinking about it!

Hi Allen, I actually have an LTR 6 unit I am looking at that we are trying to turn a few units to MTR. It is directly across the street from a huge hospital. I didn't know that was this popular with others. Are you interested in it? Cincinnati is the most popular city in OH for traveling nurses!

Hi Sam, sounds like a great idea. Are you looking for a buyer or a property manager?

Hi Allen, I am good on a PM! But I am lacking where a buyer should be. Traveling nurses would do great here, it is directly across the street, walkable, and good road. I had someone looking but he was nervous by the MTR. But my MTR PM loves it

Thanks for thinking of me Sam. I'm not looking to buy out of state right now and if I did I would manage it with my own management company. Good luck!
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