The Complete Guide On How to Invest In Multifamily Real Estate

A real estate investor can create or replace a full time income with a single multifamily property.  Since Covid the multifamily real estate sector has seen record growth and historically Amerian rental markets are safe investment.  Today we will go over everything a beginning real estate investor need to know about investing in multifamily real estate properties.  You’ll see all the definitions, how to get started, the team to build, how to make the most ROI and even how create passive income with multifamily properties zero down and without getting a loan.  Let’s get started!

Investing in multifamily real estate properties for beginners: How to anybody can create generational passive income with multifamily real estate.

Even if you only focus on singe family houses, every real estate should know at least the basics of investing in multifamily real estate.  Understanding the basics will help you do more deals, help other investors in your network and add more units to your portfolio.  Today you’ll learn everything you need to get started in multifamily real estate and create a passive income on the side or as your main business.

You can download the Quick Guide above here:
How to Invest in Multifamily Real Estate In Nine Easy Steps.

Multifamilies can be very profitable and on this page I’ll walk you through EVERY step.

First of all, THANK YOU again for making this channel the number one channel for Indiana real estate on YouTube according google analytics and SocialBlade info for BigReia.com.  We’re also building the world’s largest organization of Special Needs Business Owners and Real Estate Investors.

What is a Multifamily Property?

A multifamily property is considered to be any property with two or more living units for tenants. The smallest multifamily property is a duplex with two residential units. However, multifamily real estate can also include towhhome, condominiums, student housing, senior living centers, large apartment complexes with hundreds or thousands of units and more.

A multifamily property is pretty much any property type you can think of that involves multiple units in the same property, even if the owner lives there in one of th units. For example, if you life on one half of a duplex and you rent out the other half, you both live in a multifamily property.

That is an example of house hacking.

For more on house hacking check out our free class.

Should new real estate investors invest in multi family properties? Yes, with the proper training, education and expectations multfamily investing can provide great opportunities to both new and experienced real estate investors. Today I’ll go everything you need to get started and hit the ground running.

Most real estate investors who buy multifamily units (also called multifamily homes) or properties – buy buildings with five or more residential units. These multifamily properties are considered “commercial” real estate investing and qualify for commercial loans instead of residential mortgages.

The Difference Between Investing in Multifamily Properties and Single Family Properties?

I’ve been on both sides of this and we ALWAYS suggest you start with single family residential (SFR) before going into duplexes let alone multifamily properties. Here are 10 differences between investing in multifamily properties and single family properties.

Scale:

Investing in multifamily properties is like upgrading from a cute little goldfish to having your own aquarium with a variety of colorful fish. It’s a big leap in scale… get it SCALES… oh forget it…Multifamily properties offer the opportunity to invest on a larger scale, typically with multiple units within a single building, while single-family properties consist of a single unit.

Cash Flow Potential:

Multifamily properties bring in more cash flow than a single-family property. It’s like having multiple income streams flowing into your bank account, while a single-family property is more like a trickle.Multifamily properties often generate higher cash flow due to the multiple rental units, which can offset expenses and vacancies more effectively compared to single-family properties.

Diversification:

Investing in multifamily properties is like having a buffet of tenants. If one unit is vacant or causes trouble, you still have other plates on the table to keep your investment meal going strong.Investing in multifamily properties allows for diversification of rental income across multiple units and tenants, reducing the risk of income loss compared to relying solely on one tenant in a single-family property.

Property Management:

Managing a multifamily property is like being the ringmaster of a circus. You’ll juggle multiple tenants, maintenance requests, and the occasional clown. Single-family properties are more like a one-man show, with less chaos under the big top. Residential property and single family homes are great too, but for the right real estate investor apartment complexes are the way to go.Managing multifamily properties usually involves more intensive management due to multiple units, tenant turnover, and maintenance needs. Single-family properties generally require less management effort.

Economies of Scale:

With multifamily properties, you can buy toilet paper in bulk, saving you money and ensuring you never run out. Single-family properties mean you might have to do some last-minute grocery store runs when you least expect it. All experienced real estate investors will tell you, buying in bulk makes property management easier.Multifamily properties may benefit from economies of scale in terms of maintenance, repairs, and operational costs. Bulk purchasing of supplies and shared services can result in cost savings compared to managing individual single-family properties.

Financing Options:

Multifamily properties and commercial real estate open up a treasure chest of financing options, while single family properties are more like searching for spare change under the couch cushions to fund your investment. Not all rental properties are seen as equal to the banks.Multifamily properties often have more diverse financing options available than for a single family home, including commercial loans, while single family home properties typically rely on traditional residential mortgage loans.

Appreciation Potential:

Multifamily properties can appreciate like a fine wine, getting better with age and generating more profit. Single family homes might appreciate like a cute puppy, stealing your heart but not necessarily your wallet. Both however, can be a great addition to your real estate portfolio.Both types of properties have the potential for appreciation, but multifamily properties are often valued based on their income-generating potential, which can result in increased value over time. Any investment property can appreciate, but with income based valuation you can force appreciation by increasing rent.

Tenant Turnover:

A single family home will usually have longer term tenants who are more committed and family focused, multifamily rental properties usually have tenants who come and go like ships in the night. With multifamily investment property it can feel like hosting a tenant party where they all play musical chairs with their living quarters, constantly changing and moving.Multifamily properties may experience higher turnover rates as tenants often rent for shorter periods. Single family properties, especially those offering longer-term leases, can provide more stable and predictable occupancy rates.

Market Demand:

Multifamily properties cater to a wide range of renters, from young professionals to retirees. Single-family properties are like that one popular kid in high school, appealing to a specific niche but not always the masses.Multifamily properties often cater to a broader market segment, including renters seeking affordable housing options. Single-family properties appeal more to individuals or families looking for a specific lifestyle or long-term residence.

Exit Strategy:

Selling a multifamily property is like bidding farewell to a big extended family. Single-family properties are more like saying goodbye to your childhood home, filled with memories but on a smaller scale.Selling a multifamily property can involve a different sales process and potential buyer pool compared to single-family properties. Investors may target different types of buyers, such as other investors, developers, or owner-occupiers, depending on the property type.

So let’s dive in and go over the best nine steps to take for any real estate investing – beginner or veteran – should follow to get start investing in multifamily real estate.

Step One:  Learn the Basic Math
What You Need to Know to Invest in Multifamily Real Estate

There are a few basic terms and concepts that you wanted to know inside and out.  This will help you hit the ground running and yes it is necessary so please don’t get intimidated all of these items are very important to know but also very easy to learn.

If you have any questions we are always here to helps. 

Let’s start with the basics of a CAP rate.

What is a Cap Rate – also the Capitalization Rate.

In the world of multifamily and commercial real estate, property value is based on the income of the property. The “Cap Rate” is one of the most common measures used value properties. Yes you can have slow but steady appreciation but the REAL focus is on the income.

If you bought a property for cash, the cap rate, or capitalization rate, tells what return you would make on that case every year. For example if a property has a cap rate of 10% then if you paid $1M cash for the property you would make back 10% a year, or $100,000 a year.

For real estate investing a good cap rate is usually around 8% – 12%.

Higher cap rates are now always better as they usually mean more risk, low cap rates mean you may have trouble making your mortgage payment or making a profit.  You should always know your cap  rate, how to calculcate and most importantly how to improve it.  We will cover all of that today.

Here’s how to calculate a property’s cap rate:

NOI (divided by) Price

This is the opposite of a P/E Ratio which is used to value businesses and come up with the multiplier. Think of this is the E/P Ratio since the “Earnings/NOI” is the numerator. Speaking of which what the heck is an NOI?

What is NOI or Net Operating Income?

The net operating income of a real estate investment property is the total income minus the operating expenses such as taxes, insurance, property management, utilities and maintenance.

Net operating is the gross income, or total revenue, minus necessary costs.

The same formula is used to calculate EBIT (Earnings Before Interest and Taxes) but EBIT also includes depreciation and amortization.

Calculating NOI is pretty simple, just add all the revenue/income and subtract the expenses. When you look at any multifamily properties, talk to any commercial real estate broker or look at any investment properties the NOI and cap rate will be easy to find.

Want to Calculate the NOI in Less Than 10 Seconds?
Use The 50% Rule.

This is NOT a foolproof method but if you don’t have comps, are in a hurry or just need some north star as guidance the “50% Rule” can help.

The 50% rule is used by real estate investors to quickly determine a property’s net operating income by assuming that half of the income will go towards expenses, leaving the other half as profit.

So if a property is making $2,000 in monthly income you would tkae 50% of that, or $1,000 a month and use that as your NOI. Again this is NOT foolproof but it is a fast way to make real estate investing simpler and to make estimates and improve decision making.

What is Debt Service?

Basically, debt service is your mortage payment. Maybe you won’t use standard conventional mortgages and you’ll do seller financing or something else (we teach it all by the way) but either way if you have any debt then the debt service is what you pay on that every month or year.

Debt service will be paid OUT of your NOI.

What is Net Cash Flow?

This is the simplest term to calculate:

Net Cash Flow = (All the money that came in) – (All the money that went out… yes ALL of it)

So this is how much you REALLY made after paying for that plumbing repair, the roof inspection, the laundry machines, the landscaping and ALL your debt service.

So now that you know about cap rates, NOI, the 50% Rule, debt service and net cash flow you know what to look for when you see a multifamily property.  These tools will be the measuring stick that you use to determine if a deal is good or not.

Step Two: Find Deals
How to Find the Best Multifamily Properties To Buy?

Set Your Outcome First.

Normally we teach to create a passive income of at least $10,000 – $30,000 in monthly income. You can use those numbers or pick your own, the important thing is to set a desired outcome and then work backwards.

Let’s say you want to make $10,000 in passive income for example, that would be five duplexes that make $2,000 in monthly income. No, you won’t have all that passive income and consistent cash flow immediately because it will take time but at least now you have a goal to work with. Many investors never get even that far, you’re lucky.

Start Looking at Deals That Are On The Market.

Go through Zillow listings, talk to local realtors, folks at a local property management company, investors, wholesalers, Facebook groups, lenders, mortgage brokers, hard money lenders, etc.

To start just scan Zillow and start doing basic math.

Here are questions you should be able to answer about your potential multifamily property:

What is the cap rate?

What is the NOI and 50% rule?

What would my debt service payment be?

What other expenses did they list that I may not have thought about?

Bottom line: what would be the monthly net cash flow based on what I’m seeing?

Now you’ll start to see how realistic your expecations are. Remember the quality of a buyer or an investor is based on two things; your expectations and resources. Once you have those in line and realistic you’ll be doing deals in no time.

Here are some helpful websites to start searching through for multifamily investments:

  1. LoopNet (www.loopnet.com): LoopNet is one of the largest commercial real estate listing websites. It includes a dedicated section for multifamily properties, allowing you to search for properties based on location, size, price, and other criteria.
  2. Zillow (www.zillow.com): Zillow is primarily known for residential real estate, but it also features multifamily properties for sale. You can search for properties by location and filter the results based on the number of units, price range, and other specifications.
  3. Realtor.com (www.realtor.com): Realtor.com is another comprehensive real estate platform that lists multifamily properties for sale. It offers detailed search filters, including property type, price, location, and number of units.
  4. Apartments.com (www.apartments.com): While Apartments.com is primarily used for renting apartments, it also has a section for multifamily properties that are available for sale. You can search for properties by location and filter the results based on price, number of units, and other features.
  5. CommercialCafe (www.commercialcafe.com): CommercialCafe is a commercial real estate platform that includes multifamily properties among its listings. You can search for properties by location, size, price, and other criteria.
  6. CoStar (www.costar.com): CoStar is a comprehensive commercial real estate database that includes multifamily properties for sale. It provides detailed property information, market analytics, and research tools for investors and brokers.
  7. CREXi (www.crexi.com): CREXi is an online marketplace for commercial real estate, including multifamily properties. It offers a user-friendly platform to search for properties, connect with brokers, and access due diligence information.
  8. BiggerPockets (www.biggerpockets.com): BiggerPockets is a real estate investing platform that includes a marketplace for buying and selling multifamily properties. It also provides educational resources and a community of real estate investors.
  9. Auction.com (www.auction.com): Auction.com is a platform that specializes in real estate auctions, including multifamily properties. You can search for properties, participate in online auctions, and potentially find investment opportunities at competitive prices.
  10. MLS (Multiple Listing Service) websites: MLS websites vary by location, but they are commonly used by real estate professionals to list properties for sale. Depending on your area, you can search for local MLS websites to find multifamily properties for sale. Examples include MLS.com, MLSListings.com, and MLS.ca (Canada).

Next you need to build your team.

Step 3: Build Your Multifamily Investing Dream Team.

As you start looking at multifamily property listings and narrow your search you want to build your team at the same time. This means connecting with a good realtor, property management company, lenders, closing company, attorneys, eviction legal experts, hard money lenders, appraisers, contractors, landlords, wholesalers, investors, etc.

You want to help them all in some way, that’ll go a long way to building Goodwill within that local real estate community. You want to get in touch with these people so that you can close on deals faster, learn about the market better and manager your properties more efficiently.

Here’s an email that I LOVE and our team uses all the time.

Sample Introduction Email to Realtors, Brokers, Lenders, Investors, Wholesalers and Property Managers:

Hi (Name),

I got your email from (Name of referrer or Site) when I asked who I should talk to about buying multifamily real estate deals here in Indianapolis.

I’m pre-qualified for up to $700k, I’m looking for a 3-4 unit on the east side that hopefully has the potential for house hacking but that’s not necessary. I’m also a researcher at Lilly, a devoted Colts fan and a father of five.

I’ve been looking at properties but I would just like to get the right team in place of brokers, lenders and property managers so could you please let me know if you are the right person for this or who I shoud be talking to? I’d really appreciate your help.

If you’re super nice there’s knock, knock joke in it for you. Oh okay, here it is anyway:

Knock, knock.
Who’s there?
Realtor.
Realtor who?
We’ll tour this new new multifamily property and see if it’s great deal!

Sorry, I had to. Okay that’s it for now please let me know your thoughts as I’m kind of new to this and you really seem like you know what you’re doing so your help and insights are greatly appreciated.

Thanks so much (FIRST NAME)! = )

~ Eve
317-555-9595 (That’s my cell, please call or text anytime)
Love (at) BigReia.com

Did you notice a few things about that email?

Notice that FIRST I explain how I got their info and WHY I’m contact them then the next thing I tell them are the resources that I have and my expectations. Then I ask them to categorize themselves. The cheesy joke helps in disarming them and set the right friendly tone.

This same email can be used with a real estate agent, commercial real estate brokers, managers at real estate investment trusts, apartment building staff and the list goes on.

Financing a multifamily property: Choose A Loan

There are many different kind of financing and loan options to buy multifamily properties with. While seller financing and other creative finanacing options are available, let’s first look at more traditional loan options first.

1.) Conventional Loans:

These are like the classic vanilla ice cream of financing options. They’re reliable, straightforward, and everyone seems to love them. Just make sure you have a steady income and a good credit score before diving into this scoop.These loans are offered by banks and financial institutions and are a popular choice for purchasing multifamily real estate. They typically require a down payment of 20% or more, although some lenders may accept lower down payments. The interest rates and terms vary based on your creditworthiness and the lender’s criteria. Conventional loans have fixed or adjustable interest rates and repayment periods typically ranging from 15 to 30 years.

2.) FHA Loans:

Did you know the “FHA” actually stands for “Funny Housing Adventures”? Okay, maybe not, but these loans can be a great option for first-time buyers or those with a lower down payment. Just be prepared for the thrilling roller coaster ride of mortgage insurance premiums.The Federal Housing Administration (FHA) offers loans specifically designed to help individuals and families purchase multifamily properties. FHA loans have lower down payment requirements compared to conventional loans, sometimes as low as 3.5% of the purchase price. These loans are insured by the FHA, which allows lenders to offer more flexible credit criteria and terms. However, FHA loans require mortgage insurance premiums to protect the lender in case of default.

3.) VA Loans:

Who says veterans don’t get perks? With VA loans, you can march right into your dream multifamily property with little to no down payment. It’s like a military discount for real estateVA loans are available to eligible veterans, active-duty service members, and their spouses. These loans are guaranteed by the Department of Veterans Affairs and offer favorable terms. One significant benefit is that VA loans often require zero down payment, making them an attractive option. They typically have competitive interest rates and more flexible credit requirements compared to conventional loans. However, VA loans also require a funding fee, which can be financed into the loan.

4.) USDA Loans:

If you’re looking for a loan that’s farm fresh, USDA loans are your answer. They cater to those looking to buy multifamily properties in rural areas. So get ready to embrace the countryside charm while sipping your morning coffee on the porch.The U.S. Department of Agriculture (USDA) offers loans through its Rural Development program to promote rural development. USDA loans are available for multifamily properties located in eligible rural areas. They often provide favorable terms, including low-interest rates and zero down payment requirements. USDA loans have income limits, and the property must meet certain criteria to qualify. Additionally, USDA loans require mortgage insurance.

5.) Commercial Loans:

Buying a larger multifamily property? Time to put on your big-boy/girl pants and dive into the commercial loan world. It’s like playing Monopoly, but instead of fake money, it’s all about real dough.When purchasing larger multifamily properties with more than five units, commercial loans are typically used. These loans are offered by banks and specialized lenders and have different underwriting criteria and terms compared to residential loans. Commercial loans may require larger down payments, have shorter repayment periods, and often have adjustable interest rates. Lenders assess the property’s income potential and the borrower’s financial strength when considering commercial loans.

6.) Hard Money Loans:

Need money fast? Hard money loans are like the speed demons of financing options. Just be prepared for interest rates that might make your eyebrows shoot through the roof. This is like buying a house on a credit cart but hey, desperate times call for desperate measures.Hard money loans are short-term loans provided by private lenders or investors. They are often used when traditional financing options are not available or when quick financing is needed. Hard money loans have higher interest rates and shorter repayment periods compared to conventional loans. They are secured by the property itself and are based more on the property’s value rather than the borrower’s creditworthiness.

7.) Seller Financing:

Want to feel like a real estate boss? Strike a deal with the seller and become the Beyoncé of your own financing destiny. Just make sure the seller is as sweet as their property.In some cases, the property seller may be willing to finance part or all of the purchase. This arrangement allows you to make payments directly to the seller over an agreed-upon period. Seller financing can be beneficial when you’re unable to secure traditional financing or want more flexible terms. The terms of seller financing, including interest rates and repayment periods, are negotiated between the buyer and the seller.

8.) Syndication and Partnerships:

Can’t afford the whole multifamily property on your own? Time to gather your investor buddies and create a real estate superhero squad. It’s like the Avengers, but with mortgage calculators instead of superpowers.If you’re looking to invest in a larger multifamily property but don’t have sufficient capital, forming a syndication or partnership can be an option. Syndication involves pooling funds from multiple investors to purchase the property together. This allows you to spread the financial risk and share the responsibilities and rewards of property ownership. Syndications can be structured in various ways, such as limited partnerships or limited liability companies (LLCs), and each investor’s involvement and financial stake are determined by the agreement.

Step 4: Make Offers

Once you know your desired outcome and financial targets and the realities of the market you are investing in then you know enough to make serious offers. You can start by making verbal offers and talking to the realtors and others to see if it makes sense or why it doesn’t.

You’ll be making and getting a lot of offers, that’s why the next step is so important.

Step 5: Analyze and Choose Investments That Match Your Goals

Remember as long as you have the correct match between resources and expectations you should have no problem finding deals no matter how competive or dead the market. The stock market is faster obviously, but you can create your OWN market by following these steps and having the right plan.

That is why it is so important you make sure that your goals are met whenever you’re investing in multifamily properties. The same goes for single family homes as well but right now our focus is multifamily investments.

Calculate Your Cash Flow

Remember our formulas and questions from above:

What is the cap rate?

What is the NOI and 50% rule?

What would my debt service payment be?

What other expenses did they list that I may not have thought about?

Bottom line: what would be the monthly net cash flow based on what I’m seeing?

Doing the math is going to be mission critical as you go through offers and counter offers.

Is There Potential for House Hacking?

In some markets you may want to change your standards and house hacking can help me an unattractive property turn into one that makes sense. With house hacking you can live in one unit and rent the others out so that your tenants can (hopefully) make your mortgage payment and then some.

Not every multi family property will be a good fit for this, that’s why you want do to ALL the math above to find out.

Analyzing Your Multifamily Properties

As you make offers and get counter offers you want to keep an eye on the numbers. Remember that as long as you are realistic with your goals and expectations AND you have the right resources you will have no problem doing deals.

During your analysis you should know the cap rate and a few other things:

Population Growth

We have a had a few deals that were borderline but after doing some research on population, income, demographics and other renter migration data we went ahead and did the deal. Here are some sites that can help find that information:

  • RentCafe:
    RentCafe offers a range of rental market data, including renter migration trends and statistics. They provide insights into the movement of renters between cities, neighborhoods, and regions. Visit their website and explore their market reports and data tools. [Website: RentCafe – https://www.rentcafe.com/]
  • Apartment List:
    Apartment List conducts research on rental trends and provides data on renter migration patterns. They offer reports and articles that analyze renter mobility and provide insights into popular destinations for renters. [Website: Apartment List – https://www.apartmentlist.com/rentonomics]
  • Zillow Research:
    Zillow Research provides comprehensive housing market data, including rental market trends and migration patterns. They offer reports, articles, and interactive tools that allow you to explore renter migration statistics at the national, regional, and local levels. [Website: Zillow Research – https://www.zillow.com/research/]
  • U.S. Census Bureau:
    The U.S. Census Bureau collects and publishes data on population, housing, and migration. Their website provides access to various surveys and reports that include renter migration statistics at the national and regional levels. [Website: U.S. Census Bureau – https://www.census.gov/]

    The Total Number of Units

    You may need to start small with just a duplex or convert single family homes into multifamily real estate deals. We always suggest starting with a duplex or with house hacking because as long as you follow our 1% guidelines you should be safe. Which brings us to the next item:

    Your Mortgage Payment and Debt Service

    When you talk to your lender you want to know exactly what the cash to close amount is going to be and what your exact payment amounts are going to be. This will involve your debt to income ratio and the cap rate (ratio) of the multifamily apartments you are purchasing for example.

    The better you do this math the more you’ll know exactly how much money you’ll be making every month. One of the many multifamily investing benefits is that no matter how many rental units, any commercial property is valued by the income but you’ll know how much of that income you’ll see by doing the math on your debt payment.

    Now as you get ready to close make sure you know how you’re going to MANAGE the deal.

    Managing Multifamily Properties

    You have three options in managing your rental properties and the same goes for an individual housing unit or any real estate investing deal as well:

    • You can manage them yourself.
    • You can hire a property management company.
    • You can build your own management team or company.

    Should You Hire a Property Manager for Your Multifamily Properties?

    New and experienced real estate investors often ask me if they should hire a property manager or manage their rentals themselves. In most cases we recommend you hire a manager, well pretty much in all cases you should hire a property manager or build a property management team to handle your real estate investments. You need to focus on what will give you the highest and best ROI, revenue and net operating income. This is all about CASH FLOW baby.

    Think of you real estate investment portfolio as a garden, your management team will nurture, water and harvest your crop for the best results. The big secret is your CHECKLIST and POLICIES, so you are hiring your team to execute and improve your practices. You can use professional property managers or even your real estate agents to do the job.

    What to consider when looking hiring a property manager for multifamily properties:

    If you are in Midwest you can check out our list of Indianapolis property managers, if not you can use this checklist to find the best property managers. 

    1.) Time and Expertise:
    Managing multifamily properties is like hosting a never-ending party. Between handling tenant issues, maintenance requests, and paperwork, it’s like being a full-time party planner. Hiring a property manager frees up your time, allowing you to indulge in other hobbies, like perfecting your salsa dancing skills or becoming a pro at underwater basket weaving.Managing multifamily properties requires significant time and expertise. From screening tenants, handling maintenance requests, addressing tenant concerns, and ensuring compliance with local regulations, the tasks can quickly become overwhelming. Hiring a property manager allows multifamily investors like you to leverage their knowledge and experience, freeing up your time to focus on other investment opportunities or personal pursuits.

    2.) Tenant Relations:
    Dealing with tenants and collecting rent payments is like navigating a human-sized game of Minesweeper. Property managers are trained professionals who can diffuse tense situations and address tenant concerns, sparing you from awkward encounters that might resemble a stand-up comedy routine gone wrong.Dealing with tenant-related issues is an integral part of property management and with any rental property or apartment complex of an asset class. A property manager acts as the intermediary between you and the tenants, handling rent collection, lease agreements, evictions, and addressing tenant concerns promptly. Their expertise in tenant relations can help foster positive relationships, leading to higher tenant satisfaction and tenant retention rates. These things have a DIRECT impant on your net operating income.

    3.) Marketing and Tenant Acquisition:
    A good property management company Finding the right tenants for your multifamily properties is like searching for a unicorn in a haystack. You want property managers who are allergic to vacant units and have a knack for marketing vacancies and attracting quality tenants, making them the equivalent of unicorn whisperers. With their help, you’ll have tenants lining up at your door like eager fans at a celebrity autograph signing.Attracting and screening quality tenants is vital for property value and running a successful multifamily property or even a residential rental property. Property managers have the resources and knowledge to effectively market vacancies, conduct thorough tenant screenings, and select reliable tenants who pay on time and maintain the property well. Their expertise can minimize vacancies and potential financial losses.

    4.) Property Maintenance and Repairs:
    Property maintenance and repairs are ongoing responsibilities that can consume significant time and resources. Property managers have a network of trusted contractors, ensuring timely and cost-effective maintenance. They also conduct regular property inspections, identifying potential issues before they escalate into costly repairs.

    5.) Legal Compliance:
    Navigating local regulations, fair housing laws, and landlord-tenant regulations can be complex. Property managers are well-versed in these legal aspects, minimizing the risk of legal disputes and ensuring compliance with all applicable laws. Their knowledge and experience help protect you from potential legal pitfalls and keep steady cash flow.

    6.) Financial Management:
    Property managers handle rent collection, financial reporting, budgeting, and expense management. They maintain accurate records, provide detailed financial statements, and ensure timely rent payments. This level of financial management provides transparency and allows you to track the performance of your investment.

    Also here are some helpful sites to use when hiring a property management team:

    1. Institute of Real Estate Management (IREM): IREM is an international organization that provides education and resources for real estate management professionals. Their website offers valuable insights and tools to help you find certified property managers specialized in multifamily properties.
    2. National Association of Realtors (NAR): NAR is a well-known association for real estate professionals. They have a dedicated section on property management, which includes resources, articles, and a directory to help you find property managers experienced in handling multifamily properties.
    3. All Property Management: All Property Management is an online platform that connects property owners with reputable property management companies. They have a search feature where you can specify your location and property type to find property managers specializing in multifamily properties.
    4. Buildium: Buildium is a property management software platform that offers tools for property owners and managers. While they primarily focus on software solutions, their website also provides valuable resources and tips on hiring property managers for multifamily properties.
    5. Yelp: Yelp is a popular review platform where you can search for property management companies in your area. Reading reviews from other property owners can give you insights into the reputation and quality of service provided by different property management firms.

    We recommend first doing it yourself or hiring a company and being VERY involved so that you know each step inside and out. So much of real estate investing success is knowing how to build your team and if you know their job it’ll make it easier for you set policies and procedures for them to follow.

    After that you can do the third option and build a team to manage for you, pick the best people and practices that you learned and implement them with your team.

    Get Contractor Quotes for Repairs and Other Work

    As you are going through offers and settling on your purchase you want to be in regular communication with general contractors and handymen so that you can get estimates on any repair work that may be needed. You want a detailed Scope of Work (SOW) that details everything.

    How can real estate investors find good general contractors?

    As a real estate investor the best place to find contractors is through referrals in your network, if you don’t have a network that you need to start building one and here’s how you can do that.  We will start by looking how to build your network and then specifically how to find contractors.

    How to build your real estate network:

    Meetup (www.meetup.com):
    Meetup is a platform that hosts various interest-based groups, including real estate investment clubs. Visit the website, enter your location, and search for real estate investment or real estate networking groups in your area. You can join the groups and attend their meetings and events.

    National REIA (www.nationalreia.org):
    The National Real Estate Investors Association (REIA) is a national organization that supports local real estate investment clubs across the United States. Their website provides a directory of affiliated clubs, allowing you to search for clubs by state and city.

    BiggerPockets (www.biggerpockets.com):
    BiggerPockets is an online community and resource platform for real estate investors. They have a dedicated forum section where you can connect with other investors and find local real estate investment clubs. Engage with the community and ask for recommendations specific to your area.

    Join Local Real Estate Investment Clubs:
    Find any and every available club, forum and discussion group and look at how many members there are and how recent the activity is in the group.  Find the most responsive, join them and become an asset and offer help.

    Local real estate forums and Facebook groups:
    Search for local real estate forums or Facebook groups in your area. These platforms often have discussions and announcements about real estate investment clubs. Join the groups, ask for recommendations, and connect with other members who can provide insights.

    Chamber of Commerce and business associations:
    Check with your local Chamber of Commerce or other business associations in your area. They may have information about real estate investment clubs or networking groups that cater to investors in your region.

    Real estate seminars and workshops:
    Attend free real estate seminars, workshops, and conferences in your area. These events often attract local investors and provide opportunities to network and connect with like-minded individuals who may be part of real estate investment clubs.

    Local real estate agents and professionals:
    Reach out to local real estate agents, real estate attorneys, property managers, and other professionals involved in the industry. They may be aware of local investment clubs or have contacts who can provide information about such groups.

    Real estate investing publications:
    Subscribe to or browse through local real estate investing publications. They often feature advertisements or articles about real estate investment clubs or networking events in the area.

    How to find general contractors to rehab your investment properties:

    The best thing you can do to build your real estate business is to build your network so we definitely recommend doing the above steps, aside from that if you need a contractor today to do work then here are some places to find general contractors right now.

    Angie’s List (www.angieslist.com):
    Angie’s List is a reputable online directory that provides reviews and ratings for various service providers, including contractors. It offers a platform for homeowners and investors to find and hire reliable contractors for property repairs.

    HomeAdvisor (www.homeadvisor.com):
    HomeAdvisor is a popular online marketplace that connects homeowners and real estate investors with local contractors. Users can browse through a wide range of contractor profiles, read reviews, and request quotes for property repair and renovation projects.

    Thumbtack (www.thumbtack.com):
    Thumbtack is an online platform that allows users to find and hire local professionals, including contractors, for various services. Real estate investors can post their project details, and interested contractors will provide quotes and information about their expertise.

    Houzz (www.houzz.com):
    Houzz is a website dedicated to home design and renovation. It features a directory of professionals, including contractors, who specialize in property repairs and renovations. Investors can browse portfolios, read reviews, and contact contractors directly.

    Porch (www.porch.com):
    Porch is an online platform that connects homeowners and investors with trusted contractors for property repairs and renovations. It offers a comprehensive database of professionals, complete with reviews, project photos, and contact information.

    BuildZoom (www.buildzoom.com):
    BuildZoom is a platform that helps investors find and hire licensed contractors for property repairs and remodeling projects. It provides access to detailed contractor profiles, licensing information, and customer reviews to aid in the decision-making process.

    Yelp (www.yelp.com):
    Yelp is a widely used review platform that covers various service categories, including contractors. Real estate investors can search for contractors in their area, read reviews from previous clients, and assess their reputation and reliability.

    Contractors.com (www.contractors.com):
    Contractors.com is an online directory specifically designed to connect property owners, including real estate investors, with contractors for construction and renovation projects. It offers a simple search function to find contractors based on location and project type.

    Craigslist (www.craigslist.org):
    Craigslist is an online classifieds platform that features a section dedicated to services, including home improvement and contractor services. While it is important to exercise caution and conduct thorough research when using Craigslist, it can be a resource for finding contractors in specific areas. 

    Even if the property doesn’t need work it is good to know what upgrades will bring you the best ROI and make it a good addition to your real estate investment portfolio.

    Step 6. Close the Deal

    Now you’ve picked the right deal, you got the right financing, you’ve got your property management team ready to take over or consult you and you also have your contractors ready to go before the ink is even dry.

    As long as you did the prep work ahead of time this should be a breeze because your agents and brokers picked the right title company, insurance and closing agents so you are ready to rock. Close the deal and move forward.

    Step 7. Renovate, Make Repairs And Get Ready For Your Tenants

    Now you take the SOW and get it done but also start marketing the property immediately so you can get your renters lined up. Remember we use ads, signs and your buyer/renter list and you should be able to move any property quickly.

    Here’s a checklist we use to get our multifamily properties ready for tenants:

    Property Inspection:
    Conduct a thorough inspection of the property to identify any necessary repairs, maintenance, or safety issues. Check for any structural or cosmetic damages that need to be addressed.  Take pictures and videos so it is all documented.

    Cleaning and Maintenance:
    Clean the entire property, including common areas, units, windows, and floors. Ensure all appliances are in good working condition. Replace any broken or worn-out fixtures, such as faucets, light switches, or doorknobs. Service and clean HVAC systems, ensuring they are in optimal working condition.  Have links to all the instructions manuals that you can email tenants so they have it permanently.

    Safety Measures:
    Install and test smoke detectors and carbon monoxide detectors in each unit. Ensure all doors have functioning locks, and consider installing deadbolts for added security. Check and repair any safety hazards, such as loose handrails or uneven walkways.  

    Utilities and Services:
    Activate utilities (electricity, gas, water) in the property’s name or provide tenants with instructions to do so. Ensure that all utility connections are functioning properly. 

    Pest Control:
    Schedule a professional pest control service to inspect and treat the property, if needed. Seal any openings or cracks that may allow pests to enter the property.  Keep a list of warning signs and have it posted in the garage, inside power boxes and other helpful areas.

    Property Documentation:
    Create lease agreements and necessary addendums outlining terms and conditions for tenants. Prepare move-in and move-out inspection checklists to document the property’s condition.  Remember to use pictures and videos and email them to the tenants, property managers and contractors and anybody else that may need them for reference.

    Legal and Compliance Requirements:
    Familiarize yourself with local rental laws and regulations, including rental licensing and code compliance. Ensure you meet all legal requirements for renting out the property, such as obtaining necessary permits and licenses.  Keep inspection reports and certificates verifying passed inspections.

    Advertising and Marketing:
    Take high-quality photos of the property for marketing purposes. List the property on relevant rental platforms, social media, and local classifieds to attract potential tenants. Develop a marketing strategy to showcase the property’s features, amenities, and location.  

    Tenant Screening:
    Establish tenant screening criteria to evaluate prospective tenants, including background checks, credit checks, and income verification. Develop a system for collecting rental applications and conducting thorough tenant screenings.

    Move-In Preparation:
    Create move-in packets containing essential information for tenants, such as contact details, property rules, and emergency procedures. Conduct a final walkthrough of the property to ensure everything is in order before the tenants move in.  Do this walk through again with tenants and record it with audio and video and email/text it to them immediately after.

    We also start marketing WAY before the property is ready, but in the worst case scenario now is the time for marketing.

     Step 8. Market for Tenants

    You want to start marketing as soon as possible because the sooner you generate leads the sooner you make money. We market all of our properties before we even close, sometimes before we even have the property picked out. If we know the area we work with our property mangers and others and market their listings just so we can geenrate similar leads and build our buyer/renter list.

    So this is not actually “Step 8” because you want to market the property IMMEDIATELY so that you know what kind of leads and renters you can expect.

    Step 9. Optimize, Manage and Repeat

    Now you need to calibrate and make necessary adjustments to make the most of your rental property. There are single family investing benefits as well but usually with deals that are more like a multifamily home you will find managing them is easier to outsource.

    Investing in multifamily real estate can be really exciting but you have to build right foundation. When people hear terms like multifamily investing they often think you just buy an apartment building and forget it but that is not true as this will require careful scrutiny of the numbers so that when you repeat it you can do it better.

    Three Creative Ways to Make Money in Multifamily Deals

    Remember the formula for passive income is equity times production:

    Equity X Production

    So our goal to GET equity starts by CREATING equity.  Any time we increase the income of an asset we always increase the value.  By increasing income/value we are creating equity and making it easier for us to get that equity needed for our passive income formula.

    First, do this for your OWN deals and to add value to YOUR portfolio

    You should use this post and the resources I’m about is go over to increase the equity of properties that you currently have.

    Second, do this to the value of OTHER multifamily investors

    You can and should help others implement these improvements, even if you just volunteer and do it for free to test the and prove your performance.

    Third, Work as a Consultant and/or Advisor

    Once you have some proof and testimonials this is a quick way to start making at least $500 – $1,500 an hour by helping other real estate investors get started or improve.

    How do you create equity?

    There are only three ways, the DRE:

    Debt – lower the debt

    Revenue – Improve the income

    Estimate Value – Improve the “appraised” value

    Can you MAKE a multifamily property worth more?

    Yes, you can make any commercial real estate property worth more money by using forced appreciation.

    What Is Forced Appreciation for Multifamily Investing?

    Forced appreciation is when an an owner of a property takes deliberate actions in order to raise the value of the property. In the case of multifamily homes or really any real estate investment, any time you increase the income you automatically increase the value.

    Remember we learned about NOI earlier right? So one part of forced appreciation is raising the net operating income so that the property is automatically worth more. You can do this by raising the rental income as an example but there are other ways as well.

    Five ways to force appreciation on multifamily investment properties:

    Operational Enhancements:

    Investors focus on improving the operational efficiency of the multifamily property. This can include optimizing rental rates, reducing vacancy rates, implementing cost-saving measures, and improving property management practices. By increasing the property’s income and reducing expenses, the net operating income (NOI) improves, ultimately boosting its value.

    Property Upgrades and Renovations:

    Investors may undertake targeted renovations and upgrades to enhance the property’s appeal and rental potential. This can involve modernizing units, improving common areas, upgrading amenities, or enhancing curb appeal. These improvements can attract higher-quality tenants and justify higher rental rates, leading to increased income and property value.

    Repositioning, Rebranding or Retargeting:

    Investors may reposition the multifamily property in the market by targeting a specific niche or demographic. This can involve rebranding the property, implementing a new marketing strategy, or changing the property’s positioning to attract higher-paying tenants. By catering to a different market segment, investors can potentially increase rental income and property value.

    Add Income Streams:

    Property owners may explore additional income streams within the multifamily property. This can include offering additional services or amenities to tenants, such as laundry facilities, parking spaces, storage units, or pet-friendly accommodations. By generating additional income, the property’s value can be positively influenced. We will go over several examples that we use below.

    Market Conditions:

    Forced appreciation can also be achieved by capitalizing on favorable market conditions. This may involve acquiring a property in an undervalued or emerging market and benefiting from subsequent market appreciation. Timing the purchase strategically can contribute to significant value appreciation over time. Buying before gentrification is one example.

    Here’s the bottom line:

    Forced Appreciation = Lower Costs and/or Increase Revenue

    So now let’s look at how to lower costs AND increase revenue, we’ll start with cost control.

    20 Ways Lower Your Operating Costs on Multifamily Properties.

    If you can lower your costs you will immediately increase your net operating income. Since all real estate investing comes down to lowering costs and raising profits, lower costs is super important. I’ve worked with many of our real estate investors and managers and developed some KILLER checklists and policies that can help lower your costs when investing in multifamily real estate properties.

    Here are 20 Ways to Lower Operating Costs:

    1. Energy Efficiency:
      Implement energy-efficient measures such as LED lighting, programmable thermostats, and energy-efficient appliances. Estimated savings: 10% to 30% or more on electricity bills.
    2. Water Conservation:
      Install low-flow fixtures, fix leaks promptly, and promote water-saving habits among residents. Estimated savings: 20% to 30% or more on water bills.
    3. Proper Insulation:
      Ensure proper insulation in the building to minimize heating and cooling costs. Estimated savings: 10% to 20% or more on heating and cooling expenses.
    4. Regular Maintenance:
      Implement a proactive maintenance plan to identify and address issues promptly, preventing costly repairs down the line. Estimated savings: Thousands of dollars per year in repair and replacement costs.
    5. Smart Technology:
      Utilize smart technology for efficient property management, including remote monitoring of energy usage, automated systems, and smart meters. Estimated savings: 5% to 15% or more on energy and operational costs.
    6. Waste Management:
      Implement recycling programs and educate residents on proper waste disposal. While the savings may not be direct, it can reduce waste management costs and potentially generate revenue through recycling initiatives.
    7. Bulk Purchasing:
      Leverage the collective buying power of the property to negotiate discounts on supplies, equipment, and services. Estimated savings: Varies depending on the negotiated deals and volume of purchases.
    8. Water Heating Efficiency:
      Install high-efficiency water heaters or consider centralizing hot water systems. Estimated savings: 10% to 30% or more on water heating expenses.
    9. Optimize Staffing:
      Evaluate staffing needs regularly to ensure the right balance between efficiency and service. Cross-train staff members to handle multiple responsibilities. While the savings may not be quantifiable, it can lead to more efficient staffing arrangements.
    10. Technology Integration:
      Embrace property management software and systems that streamline operations, automate tasks, and enhance communication. We have a few apartment complexes that have raised appraised values by millions just by using better software. While the savings can vary, it can significantly reduce administrative costs and improve efficiency.
    11. Utility Audits:
      Conduct regular audits to identify areas of excessive energy consumption and implement strategies to reduce waste. Estimated savings: 5% to 20% or more on energy bills, depending on the findings and implemented measures.
    12. Insurance Optimization:
      Review insurance policies to ensure adequate coverage at competitive rates. Estimated savings: Varies depending on the current policies, but potential savings can be achieved by securing better rates or adjusting coverage to reduce premiums.
    13. Vendor Negotiation:
      Negotiate contracts with vendors and service providers to secure better rates or explore alternative suppliers for cost savings. Estimated savings: Varies depending on the negotiated deals and specific services, potentially leading to significant cost reductions.
    14. Resident Incentives:
      Offer incentives to residents for energy conservation or referrals. While the savings may not be direct, it can encourage residents to adopt energy-saving habits and attract new tenants.
    15. Virtual Services:
      Utilize technology for virtual services such as online rent payment, virtual tours, and maintenance requests. Estimated savings: Varies depending on the extent of implementation, but it can reduce administrative costs and improve efficiency.
    16. Water Submetering:
      Install individual water meters for each unit to hold residents accountable for their water usage. Estimated savings: 15% to 30% or more on water bills, as residents become more conscious of their consumption.
    17. Sustainable Landscaping:
      Opt for drought-resistant plants, efficient irrigation systems, and low-maintenance landscaping designs. Estimated savings: 20% to 40% or more on landscaping and irrigation costs.
    18. Renegotiate Property Taxes:
      Regularly review property tax assessments and consider appealing or renegotiating property taxes. Estimated savings: Varies depending on local regulations and the outcome of the negotiations, potentially leading to significant reductions in property tax expenses.
    19. Solar Energy:
      Explore the feasibility of installing solar panels to generate renewable energy. Estimated savings: Varies depending on the system’s size and local solar incentives, but it can lead to substantial long-term savings on electricity bills.
    20. Community Engagement:
      Foster a sense of community and encourage collaboration among residents to share resources. While the savings may not be quantifiable, it can lead to cost-sharing opportunities and reduce overall expenses.

    Now let’s look at how to CREATE more income.  Remember that by increasing income you ALWAYS increase the value and create equity.  To create passive income we need to make things worth more money, here are some ways that we do forced appreciation with out mutifamily properties.

    How to generate additional income with multifamily real estate properties?

    Now let’s look at how to CREATE more income.  Remember that by increasing income you ALWAYS increase the value and create equity.  To create passive income we need to make things worth more money, here are some ways that we do forced appreciation with out mutifamily properties.

    1.) Rent Increases

    Regularly review local rental market trends and adjust rent rates accordingly. Gradual rent increases over time can generate additional income. Regularly review local rental market trends and adjust rent rates accordingly. https://www.rentometer.com/

    2.) Laundry Facilities:

    Install coin-operated or card-operated laundry facilities in the property. Collecting a portion of the revenue from laundry services can provide an additional income stream for any piece of multi family real estate, the more rental units the better. This is usually not a good idea to try with single family houses lol.There are a bunch of helpful companies sites that can help multifamily property owners install coin and card operated laundry machines in your units, here are few:

    • Coinmach: A leading provider of laundry equipment and services for multifamily properties. They offer a range of coin-operated and card-operated laundry machines. [Link: https://www.coinmach.com/]
    • Speed Queen: A well-known brand in commercial laundry equipment. They offer a variety of coin-operated and card-operated washers and dryers suitable for multifamily properties. [Link: https://www.speedqueen.com/]
    • Commercial Laundries: They specialize in commercial laundry equipment and services. They can help you find the right coin-operated or card-operated laundry machines for your property. [Link: https://commerciallaundries.com/]
    • Laundry Owners Warehouse: A provider of commercial laundry equipment, including coin-operated and card-operated machines. They offer new and used equipment options. [Link: https://laundryownerswarehouse.com/]
    • Mac-Gray: A company that offers laundry solutions for multifamily properties. They provide coin-operated and card-operated laundry equipment and services. [Link: https://www.macgray.com/]
    • Dexter Laundry: They manufacture commercial laundry equipment, including coin-operated and card-operated machines. Their products are known for their durability and reliability. [Link: https://www.dexter.com/]
    • Laundrylux: A distributor of commercial laundry equipment, including coin-operated and card-operated machines. They offer a range of options to meet different property needs. [Link: https://laundrylux.com/]
    • Continental Girbau: They provide commercial laundry equipment, including coin-operated and card-operated machines. Their products are known for their efficiency and advanced features. [Link: https://www.continentalgirbau.com/]

    You can also work deals and add income by providing storage space.

    3.) Storage Units:

    If space allows, offer storage units for rent to tenants. Many tenants appreciate the convenience of on-site storage and are willing to pay extra for it.There are many ways that you can use extra storage space as a real estate investing technique of it’s own because you have an automatic addition to your investment portfolio if you do this right and if space allows. We build sheds, garages, tiny houses and more just to take advantage of this revenue stream. Here are some helpful resources that we use:

    • SpareFoot: An online marketplace that connects storage seekers with storage providers. You can list your available storage units on their platform and attract potential tenants. [Link: https://www.sparefoot.com/]

    • Storage.com: A website that allows you to list and promote your available storage units. It helps you reach a wide audience of storage seekers looking for convenient storage options. [Link: https://www.storage.com/]
    • SpareFoot: An online marketplace that connects storage seekers with storage providers. You can list your available storage units on their platform and attract potential tenants. [Link: https://www.sparefoot.com/]
      • USSelfStorageLocator: A platform that allows you to advertise and list your storage units for rent. It provides a user-friendly interface and helps you connect with potential tenants. [Link: https://usselfstoragelocator.com/]
      • StorageUnitAuctionList: While primarily focused on storage auctions, this website also offers a section where you can list your available storage units for rent. It can help you find interested tenants. [Link: https://www.storageunitauctionlist.com/]
      • SpareSpace: A platform that connects property owners with individuals looking for storage space. You can list your available storage units and negotiate rental terms directly with interested tenants. [Link: https://www.sparespace.com/]
      • Neighbor: A peer-to-peer storage marketplace that allows you to rent out extra storage space to individuals in need of storage solutions. It provides a secure platform for transactions and communication. [Link: https://www.neighbor.com/]
      • StorageUnitFinder: An online directory that helps storage seekers find available storage units in their area. You can list your storage units on their website to increase visibility and attract tenants. [Link: https://www.storageunitfinder.com/]

    4.) Pet Fees:

    Implement pet-friendly policies and charge a pet fee or monthly pet rent. This can generate additional income while accommodating tenants with pets.

    5.) Parking Fees

    If the property has parking spaces or a garage, consider charging a fee for parking. This can be an attractive option for tenants who require parking and can provide extra income.Here are a few companies that can help you make money from parking spaces, this has become so profitable for us that we’ve even bought extra lots, rundown houses and other properties just for the parking space. Test small and scale:

      • ParkMobile: A popular mobile parking app that allows property owners to manage parking spaces, set rates, and collect payments from users. [Link: https://parkmobile.io/]
      • SpotHero: A platform that enables property owners to list and rent out parking spaces on a short-term or long-term basis. It helps maximize parking revenue by connecting owners with drivers in need of parking. [Link: https://spothero.com/]
      • ParkWhiz: A website and mobile app that allows property owners to list and rent out parking spaces. It offers tools for managing availability, rates, and payments. [Link: https://www.parkwhiz.com/]
      • YourParkingSpace: An online marketplace that connects property owners with individuals seeking parking spaces. You can list and rent out your parking spaces, set your own rates, and manage bookings. [Link: https://www.yourparkingspace.co.uk/]
      • JustPark: A platform that helps property owners rent out their parking spaces to drivers. It provides tools for managing availability, pricing, and payments. [Link: https://www.justpark.com/]
      • CurbFlip: A platform that enables property owners to monetize their parking spaces by listing them for rent. It provides tools for managing availability, pricing, and payments. [Link: https://www.curbflip.com/]

    6.) Late Payment Fees:

    Enforce late payment fees for tenants who fail to pay rent on time. However, it’s important to follow local regulations and include late payment provisions in lease agreements.

    7.) Utility Billback:

    Implement a utility billback system where tenants are responsible for paying a portion of their utility costs. This can help offset expenses and generate additional income.You can use other companies and apps to help with this:

      • Conservice: A utility management company that offers billback services for property owners. They provide solutions for submetering, utility billing, and resident payment processing. [Link: https://www.conservice.com/]
      • PayLease: A platform that allows property owners to streamline utility billing and payment processes. They offer billback services, online resident portals, and integration with property management software. [Link: https://www.paylease.com/]
      • American Utility Management (AUM): A company specializing in utility management and billing services. They provide solutions for submetering, utility invoice processing, and resident billback. [Link: https://www.aum-inc.com/]
      • NWP Services Corporation: A utility management and billing provider for multifamily properties. They offer submetering, utility bill processing, and resident payment solutions. [Link: https://www.nwpsc.com/]
      • RealPage Utility Management: A utility management platform that assists property owners with submetering, utility billback, and resident payment processing. They integrate with property management software for seamless operation. [Link: https://www.realpage.com/property-management-software/utility-management/]
      • PayPoint: A utility billing and payment platform that allows property owners to bill tenants for utility usage. They offer various billing methods, including online payment portals and automatic meter reading. [Link: https://www.paypoint.com/]
      • SimpleBills: A utility management company that specializes in billback services for multifamily properties. They provide customized billing solutions and resident payment processing. [Link: https://www.simplebills.com/]

    8.) On-Site Services:

    Offer additional services to tenants, such as cleaning, landscaping, or maintenance, for an extra fee. This can provide convenience to tenants and create a new revenue stream.Here are some examples of services, amenities and extras that we offer our tenants and that have been the most profitable:

      • Fitness Center or Gym: Set up a well-equipped fitness center or gym within the property where tenants can exercise and stay fit.
      • Business Center or Co-working Space: Create a dedicated space equipped with workstations, printers, and high-speed internet for tenants who work from home or need access to office facilities.
      • Package Concierge or Mailroom: Provide a secure package delivery system or dedicated mailroom to ensure convenient package handling for tenants.
      • Pet Amenities: Include pet-friendly amenities such as dog parks, pet grooming stations, or pet washing areas to cater to tenants with furry friends.
      • Community Lounge or Clubhouse: Set up a common area where tenants can socialize, host events, or relax and unwind.
      • Outdoor Recreational Facilities: Offer outdoor amenities like a swimming pool, barbecue area, or sports courts for tenants to enjoy outdoor activities.
      • Car Wash or Detailing Services: Arrange for professional car wash or detailing services on-site to provide convenience to tenants in maintaining their vehicles.
      • Concierge Services: Employ a concierge to assist tenants with various tasks, such as receiving packages, making reservations, or providing local recommendations.
      • Bike Storage or Repair Station: Provide secure bicycle storage facilities or a repair station to encourage eco-friendly transportation options for tenants.
      • Childcare or Play Area: Create a designated space for children to play and offer childcare services or partner with local childcare providers for tenants with young families.

    9.) Advertising Space:

    Utilize available space within the property for advertising, such as billboards or digital signage. By renting out advertising space to local businesses, you can generate additional income.This is a HUGE secret source of revenue and we do a TON of deals with multifamily real estate deals that make them much more attractive because these revenue streams don’t cost anything to implement. Here are some helpful resources:

      • Advertise Cast:
        A platform that connects advertisers with podcasters and other media outlets. You can explore advertising opportunities and monetize your available space. [Link: https://www.advertisecast.com/]
      • Wrapify:
        A company that specializes in vehicle advertising. If you have parking spaces or vehicles on your property, you can explore opportunities to wrap them with advertisements. [Link: https://www.wrapify.com/]
      • Blip Billboards:
        A digital billboard advertising platform that allows you to rent out space on digital billboards in your area. You can set your own rates and control the content displayed. [Link: https://www.blipbillboards.com/]
      • Airbnb Experiences:
        If your property has unique features or spaces that can be utilized for experiences, you can list them on Airbnb Experiences. This allows you to earn extra income by hosting events or workshops. [Link: https://www.airbnb.com/experiences]
      • SpaceiShare:
        A platform that enables you to rent out underutilized space, including storage rooms, parking spots, or other areas within your property. [Link: https://www.spaceishare.com/]
      • Neighbor:
        A peer-to-peer storage marketplace that allows you to rent out extra storage space to individuals in need of storage solutions. [Link: https://www.neighbor.com/]
      • AdQuick:
        An outdoor advertising marketplace that connects advertisers with available ad spaces, including billboards, transit ads, and more. You can list your available outdoor advertising space on their platform. [Link: https://www.adquick.com/]
      • Communo:
        A platform that connects businesses with marketing professionals. You can list your available advertising space for marketing agencies or freelancers seeking unique advertising opportunities. [Link: https://communo.com/]
      • Lease Labs:
        Rent out available space within the property for advertising. [Link:
        https://www.leaselabs.com/]

    10.) Short-Term Rentals:

    If local regulations permit, consider renting out vacant units or a portion of the property on platforms like Airbnb or VRBO for short-term rentals. This can generate higher rental income compared to traditional long-term leases.

    11.) Vending Machines:

    Install vending machines in common areas to offer snacks, beverages, or other convenience items. You can generate additional income through the sales and commissions from vending machine providers.

    12.) Coin-Operated Amenities:

    If you have amenities like arcade games, pool tables, or foosball tables, make them coin-operated. This allows tenants to enjoy the amenities while generating extra income.

    13.) Rooftop Solar Leasing:

    Explore leasing the rooftop space for solar panel installations. You can earn income through leasing agreements with solar companies who generate and sell electricity from the solar panels.

    14.) Internet and Cable Packages:

    Negotiate bulk internet and cable packages for the property at discounted rates. By offering these services to tenants at a competitive price, you can generate additional income from the fees charged.

    15.) Community Events and Classes:

    Organize community events or classes within the property, such as fitness classes, cooking workshops, or movie nights. Charge a participation fee to generate extra income while fostering a sense of community

    16.) Referral Programs:

    Implement a referral program where existing tenants receive a monetary incentive for referring new tenants to the property. This encourages tenant referrals and can bring in additional income through new leases.

    17.) Rentable Amenities:

    If you have amenities like a clubhouse, party room, or conference space, consider offering them for rent to tenants or even external parties for events or gatherings. This can generate extra income and maximize the use of these spaces.

    18.) Car Charging Stations:

    Install electric car charging stations on the property and charge a fee for their usage. With the increasing popularity of electric vehicles, this can be a lucrative opportunity to earn additional income.

    19.) Landscaping Services:

    If you have expertise in landscaping or access to reliable contractors, offer landscaping services to other properties in the area. This allows you to generate income by providing landscaping services beyond your own property.

    20.) Smart Home Technology:

    Integrate smart home technology in units, such as smart thermostats or keyless entry systems. Market these features as premium upgrades and charge higher rent for units equipped with these technologies.

    Other Questions About Multfamily Real Estate Investing

    So now you’ve seen how to get started, how to build your team, different ways of growing the value, equity and passive income from multifamily properties and how you can get paid doing this for your own properties or as a consultant.

    Here are a few other questions that I’ve gotten:

    How Do Rising Interest Rates Affect Multi-Family Homes?

    There are several ways that rising interest rates effect the economy, the stock market and certainly the real estate market. Here’s a quick list of the important effects to consider when investing in multifamily real estate:

    Mortgage Payments:
    Rising interest rates can feel like a sneaky ninja that quietly hikes up your mortgage payments. It’s like your property saying, “Surprise! Time to dig deeper into your pockets!” So, be prepared to tighten that budget belt.As interest rates rise, the cost of borrowing money increases, leading to higher mortgage payments for property owners. This can directly affect the profitability and cash flow of multifamily properties.

    Affordability for Buyers:
    Higher interest rates can make it more challenging for potential buyers to qualify for loans and afford the purchase of multifamily properties. This could reduce demand and potentially slow down the sales market.Higher interest rates can make buyers break into a little sweat as they contemplate their bank accounts doing the limbo dance. The higher the rates, the lower the affordability. It’s like a magician making your dream of owning a multifamily home disappear in a puff of interest rate smoke.

    1. Rental Demand:
      Rising interest rates may discourage some individuals from purchasing homes, leading them to choose renting instead. This can increase demand for multifamily rental units and potentially push up rental prices.As interest rates rise, potential buyers may start contemplating the idea of renting instead. It’s like the interest rates are whispering, “Hey, why go through the hassle of buying when you can enjoy the flexibility and freedom of renting? Come join the dark side!”
    2. Refinancing Challenges:
    3. Property owners with existing mortgages may find it more difficult to refinance their loans at favorable rates. This can limit their ability to take advantage of lower interest rates and potentially impact their financial strategies.Imagine trying to catch a unicorn while riding a roller coaster. That’s what it can feel like when you attempt to refinance your multifamily property in a rising interest rate environment. It’s like a thrilling ride with unexpected twists and turns, except by thrilling I mean terrifying.

      Development Costs:
      Higher interest rates can increase borrowing costs for developers, impacting the economics of new multifamily construction projects. This could potentially slow down the pace of new development and affect housing supply.Rising interest rates can make developers scratch their heads and ponder the mysteries of the universe. It’s like a cosmic puzzle where the cost of borrowing money becomes an ever-changing riddle. So, brace yourself for some mind-boggling calculations and budget adjustments.

      Investor Sentiment and Attitudes:
      Rising interest rates can influence investor sentiment and decision-making. Investors may re-evaluate their investment strategies, taking into account the higher borrowing costs and potential impacts on property values and returns.Picture a group of investors gathered around a crystal ball, anxiously trying to predict the future of interest rates. Will they go up? Will they go down? It’s like a never-ending game of speculation that can make even the most experienced investor’s head spin. Pass the aspirin…

      Capitalization Rates:
      As interest rates rise, the required rate of return for investors may increase, leading to higher capitalization rates. This can affect property valuations and potentially put downward pressure on prices.

    The Top 10 Markets For Multifamily Real Estate Investing

    There are many great markets for multifamily real estate investing in America.  We LOVE the Midwest but here are other areas that we love to invest in as well.  You should not use short term factors impact long term decisions.

    As of 2023 – 2025 here are our favorite markets (besides Indy and the Midwest obviously) and you’ll that there are a variety of both and long term factors that make these markets the the best for multifamily investing.

    Dallas-Fort Worth, Texas

    The Dallas-Fort Worth market has a LOT going for it. The job growth across finance, technology, media, reale estate, insurance and many other sectors is strong. High and diverse labor force usually mean high apartment and renter demand.

    Atlanta, Georgia

    Atlanta has a great young source of renters due to the universities and tech companies like Microsoft, Google and Apple creating thousands of jobs. Atlanta busines friendly laws has created diverse employers and a good renter base.

    Charlotte, North Carolina

    Charlotte is a center of finance and banking companies and headquarters which generally leads to good renter markets. Charlotte’s net migration, employment and education signals are all very positive.

    Orlando, Florida

    Orlando’s tourism industry is huge but whenever we see a big city with good weather successfully move away from a pillar then we pay attention. The tech, defense and healthcare jobs are booming and should contribute even more in the next few years making Orlando a strong market for both single family houses and multifamily real estate investing.

    Houston, Texas

    Houston has great demographics, industries and expanding familes. Yes oil and gas businesses are a huge factor obviously but other sectors like tech are growing at record speeds. As cities like Houston move away from extraction industries their rental markets will thrive even more.

    Nashville, Tennessee

    This is where Amazon famously opened their “Operations Center of Excellence” which combined with education giants like Vanderbilt University has made Nashville a young, hip and tech savvy market that attracts high quality renters and still has a low cost of living.

    Las Vegas, Nevada

    Yes this is an established multifamily market for sure but with a median property price still around $300k, there are still signs that the Las Vegas rental market will continue go grow. Even in 2021 they had a second year of double-digit increases in real estate prices. Steady job growth also plays a big role.

    Raleigh-Durham, North Carolina

    Even though Raleigh-Durham has a low population they are super educated with universities like Duke, North Carolina State and UNC. The tech industry will continue booming and they have a very low crime rate.

    Jacksonville, Florida

    Jacksonville is still affordable, has warm weather and good job growth. The public schools are highly rated and renters have beach access. Jacksonville attracts single family investors as well but there multifamily market is good too.

    Phoenix, Arizona

    Phoenix has a strong employment environment, great weather and many renters and homeowners migrating there because of high prices in places like California. About a quarter of a million people moved to Phoenix in the first few years after Covid.

    Now here are the steps to get started again:

    In the meantime you can go through the previous Elevators, classes and other FREE training material and use it to grow your impact before you check out.  Use our stuff to both create passive income AND buy small businesses zero down, follow the steps, be kind, help others and you’ll…

    Do you have any other questions about investing in multifamily real estate?

    I’m here to help, we all are.  If you send me an email or text with your questions I’ll do whatever I can to answer and help you get your next deal moving.  Also I would appreciate any suggestions that would make this page more helpful.

    You should leave this page with a FULL education and resource rolodex of exactly how to get started investing in multifamily real estate and WIN big.  Please let me know how me and my team can help make this page even better. 

    THANK YOU.

    Make the Universe Smile.

    ~ Indy Anna and Rachel and Eve
    Love (at) BigReia.com
    (YES that’s my actual Direct Line and I really do answer lol, so please text me first Thx!)

    The answer to ALL problems and challenges – personal, global and universal – is based on LOVE.  Here’s the legendary James Baldwin on the power of love…

    Want more (brilliantly) EPIC posts of real estate investing and bidness badasssery...?

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    Wanna Create Generational Passive Income Buying Real Estate and Small Businesses?

    Here's a class on exactly how to make $30,000 in passive income as an out of state Indy landlord.  Exactly how many Indiana rental properties do you need to make 30 grand a month.  Anna can you help me invest in Indianapolis turnkey real estate investment properties?

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    Also we have some great posts on 30 ways to buy real estate with no money down.  That is a two part series so make sure to watch the second part on the 30 ways to buy real estate zero down and with no loans or credit.  I also get questions about our "Epic Flipping" and how to turn $1 into over $25,000 by flipping ordinary items for exponentially high ROI.

    And don’t forget our EPIC page on 100 FREE ways to find motivated sellers, we are making the number one page in the world on FREE ways of finding motivated sellers.  Also check out how I find motivated sellers from code violation properties, and also how I make over $1,500 a week giving investors access to that list

    Speaking of lists, for a list of the "Good People" and My Indy Anna Homeys - this is a FREE list of EVERY possible contact that you'll ever need to build a real estate business in the Indianapolis or the Midwest.

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    When I first go started I thought wouldn't it be great if somebody put together ONE list of every possible contact that I would ever need to build a passive income with Indiana real estate - or any Midwest real estate?  Well that's exaclty what I did with our “People Page” here it is:

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    Stay here at BigReia.com and you’ll become allergic to being an LC and addicted to improving the world and creating Income Ascension and Social Mobility for you and yours… 

    Thanks so much!  = )

    Make the Universe Smile.

    ~ Indy Anna
    Love (at) BigReia.com
    (YES that's my actual Direct Line and I really do answer lol, so please text me first Thx!)

    Free Comic Book Reveals:

    100 FREE ways to find motivated sellers.

    Free Comic Book Reveals:

    100 FREE ways to find motivated sellers.