Are you searching for information on multifamily investing strategy? Because you’re planning on investing in multifamily properties in 2021?
Having a strategy is important because, once you know your strategy, it’s what’s going to give you the proper framework for successfully investing in your first multifamily property.
In this article, I’ll share with you several tips that you can use for developing a multi-family investing strategy that will enable you to purchase your first multifamily property.
Tips For Creating A Multifamily Investing Strategy
Tip #1 – Invest By The Market – One of the first things that you can do to develop a multifamily investing strategy is to invest by the market.
This means that you target a specific area in the United States that you want to invest in multifamily properties but, ideally your goal should be to invest in those markets during an economic downturn, instead of when times are good.
Tip #2 – Invest By Property Type – Another thing that you can do when developing your multifamily strategy is to invest by property type.
Class A Multifamily – These properties are typically the best because they’ve been built within the last 10 years and include the most amenities. It’s also common to find class multi-family property built in excellent business districts for high-rise product is in demand.
Keep in mind that during times of economic downturn, these properties often have the most vacancies because, as times get tough economically, renters will downsize from Class A multi-family properties to living in Class B Multi-family properties.
Class B Multifamily – When it comes to this property class, there are typically a lot of Class B multifamily properties on the market.
You’re going to find that many of these properties have been built within the last 20 years and were recently renovated.
The biggest difference between Class A and B and multifamily properties is that there also may be some deferred maintenance and some of the amenities that the property offers may be a little bit dated so it’s important to keep that in mind when choosing these types of properties.
Class C Multifamily – For many investors, Class C multifamily rental properties are the ‘bread and butter’ of their investment portfolios.
These properties are always in demand by renters and if you keep them in great condition, it’s possible to have long term renters who renew their leases every year.
A word of warning though, Class C multifamily properties are often much older than Class A and B rentals.
If you’re in the process of investigating a Class C multi-family investing strategy property, keep in mind that the property may also have a lot of deferred maintenance that’s going to need to be taken care of before the property is in rent-ready condition.
It’s also possible that the interior of each unit is outdated as well so you’re most likely going to need to invest money into the Class C multifamily property after you purchase it and you may need to update each unit following vacancies.
Class D Multifamily Properties – Last of all, but most important are Class D multi-family properties.
What else can I say about class D multifamily properties other than what you see, is what you get?
These properties are often well over 30 years old, are sometimes in bad need of repair and there may be other issues that have to be handled before the units in the property can be considered to be in rent-ready condition.
If you’re thinking about investing in a Class D multi-family property, use caution. Although these properties are cheap, keep in mind that when you consider the Intensive use of the rental property, combined with the work that the property may need, you may ultimately be spending more money on that property than what it’s worth.
Tip #3 – Invest By The Risk Level – Another strategy to consider when investing in multifamily properties is to invest by the risk level.
Every property that you consider is going to have some degree of risk involved because of the location, condition of the property, and demand for rental properties in that market.
Ideally, if you plan on investing by the risk level your goal should be to choose a multi-family rental property that’s not as risky. This means that the property you purchase is going to be well maintained, has been professionally managed, and’s not going to need a lot of renovation or repairs before the multifamily investing strategy property is in rent-ready condition.
Tip #3 – Invest By Price – Last of all, one of the most common strategies that multifamily investors use is investing by price range. This means that you are going to set an asset price range for the property that you want to purchase and you’re only going to consider multi-family properties that fall within that range.
Many investors typically utilize this strategy because it’s one of the easiest ways to weed out properties and it helps them narrow their focus so that when they do sit down to analyze a property, or visit the property in person, they know that it’s going to fit their criteria.
Contact Trier Capital
Are you the type of investor who wants to get started investing in multifamily properties but you don’t want to do all the work necessary to source, acquire, and manage a multi-family rental?
At Trier Capital, we do all the hard work to find and acquire ideal properties, then oversee asset management after purchase, while our investors sit back, relax, and receive tax-advantaged passive cash flow.
To learn more about our proven system for investing in multifamily properties, contact me today by calling (630) 229-2383 or click here to connect with us online.