3 Immediate Ways to Add Value to Your Multifamily Purchase

by | BiggerPockets.com

If you own any multifamily property, you probably would agree that investing in this type of real estate vehicle is more of a “marathon” than a “sprint.” That being said, there are ways to add value quickly (and effectively) to small and mid-sized properties over a short period of time to get you off on the right foot. In today’s video, I share 3 ways that you can add immediate value to your small or mid sized multifamily. These strategies will get you moving into the marathon of multifamily ownership.

3 Immediate Ways to Add Value to Your Multifamily Purchase

1. Rename the building.

Many larger multifamily properties and apartment complexes tend to have a name (“___ Lofts,” “___ Apartments,” etc.). When you acquire a property such as this, it likely has a prior name and pin drop on Google. Whatever reputation the prior owner had is going to show up for the building. This could be a big issue if a lot of people have complained on places like Apartments.com. You are no longer that owner, so make sure people know you are going to re-establish things. Make a new brand for yourself, starting with a new name for the building.

Related: 3 Quick Ways to Increase the Net Operating Income on Your Multifamily Property

2. Redo the common areas.

You could put in some bushes on the exterior, spruce up carpet on the inside, add fresh paint, and much more. Current tenants will appreciate it, and along with the new name, it will help establish a fresh feel. Prospective tenants touring the property will immediately notice the upgrades and get a great first impression.

3. Get the existing tenant base on your contract.

These residents’ contracts may have expired or may be expiring. You may decide to keep them at the same rent, but lock them down under your agreement. This can not only be important for working with lenders and while refinancing, but it also establishes your control over the property.

Multifamily investors: Have you used any of these strategies? What would you add to this list?

Let me know with a comment!

About Author

Matt Faircloth

In 2005, Matt founded The DeRosa Group along with his wife, Elizabeth. At the time, the two person company owned and managed two assets – a single family home and a duplex. Over the last nine years, they have grown the company to a 12 person team owning and managing over five million dollars in residential and commercial assets throughout the central NJ and Philadelphia area. One of DeRosa’s mantras is “to make money while making a difference.”

16 Comments

  1. Andrew K.

    Matt,

    Thanks for the article, some good tips there. I’m a big fan of the BP podcasts that you and your wife have been on.

    Your point about re-branding is gold. Regardless of MF class, it reality that tenants turn to the internet to search for a rental unit–might as well make a good first (virtual) impression!

    I’m looking at a 10 unit now that could do with a few simple updates to the common areas–exterior paint, reprint parking spot lines, move dumpster location to less unsightly location, etc.

    Keep the content coming Matt!

    -Andrew

    • Matt Faircloth

      Hey Andrew!
      Thanks, I am glad you enjoyed the podcasts! We had a lot of fun with them! I’m glad you enjoyed the article as well. Good luck with your 10 unit! Consider repainting the exterior. We did that on a 10 unit we bought and it made a world of difference. 10 units are small enough that an exterior repaint won’t break the bank but will allow you to raise rents by at least 10%. Also look into new landscaping, which is affordable on a smaller building.
      Take care,
      Matt

  2. Don Spafford

    Matt,

    I really love this plain and simple article. Short and to the point! I am looking to purchase my first multi-family and these are excellent tips to follow. I would love to know some of your best advice on financing your deals especially when you are just starting out and have limited funds available.

    Thanks,
    Don

    • Matt Faircloth

      Hey Don,
      If you are limited on funds you will need to consider the following options:
      – buy at your capacity – probably the best and most conservative option. I like this one because you can build a track record and cut your teeth a bit before you take on a large deal.
      – find a seller that will do owner financing for all or some of the purchase price. Needs to be the right seller and the right deal. Not everyone will be willing to do this.
      – Find a deal that needs a bunch of work (Brandon Turner’s BRRR strategy). Use hard money or private loans to buy and renovate, then refinance.
      – enroll equity investors to come in and provide the equity to purhase and take a chunk of the deal.

      Any of the above have strings attached and pros and cons of course. Search around BP for more ideas too!

      Take care,

      Matt

    • Matt Faircloth

      Hey John,
      Glad you enjoyed. Good luck with the Jump! you will find that tenant interactions, screenings, and finding tenants are the same. Deal evaluation, maintenance, and financing change a lot. The rest is a nominal shift in scale. You will do fine! Good luck!
      Matt

  3. Peter Mckernan

    Matt!

    This Blog with the Youtube video is a perfect match to add value to people reading, it reinforces the information that was just read.

    I do love the tip to rename the property! That is something that I never thought of! Great job!

  4. John Casmon

    Good, easy tips here, Matt. Especially like the last tip on getting tenants on your contract. Many of the leases we took over were expired and this gives you an opportunity to meet with tenants and set the tone of the relationship. Thanks for sharing!

Leave A Reply

Pair a profile with your post!

Create a Free Account

Or,


Log In Here