Purchasing a multi-unit property can be an important next step for a real estate investor who had previously purchased single-family homes to rent to tenants. If you are up to the challenge, it can allow you to generate more income and build net worth faster.
An especially crucial step in this process is to determine if increased responsibility, liability, and capital reserves required to purchase a multifamily property is for you. To help in that decision, you need to perform incredibly careful due diligence. With that in mind, you should consider the following:
- Consider living in one of the units. This may allow you to qualify for owner-occupied financing which requires less money down compared to investors.
- Consider professional management. First-time apartment building buyers should think of paying a property manager to handle day-to-day issues for tenants and repairs, which normally costs a fee of 3 to 10 percent of rent.
- Last but certainly not least, choose the right professionals to help. Buying a multi-unit building can be overwhelming, so choose an experienced broker who can help you through the entire due diligence process.
Are you interested in more information? Contact our HIH team.