Are you interested in investing in multifamily properties? If so, this is an excellent decision to make.
In today’s world, it makes sense to own multifamily properties because more people are renting than ever before.
The big question is how do you get started with finding your first property?
In this article, I’ll share with you several tips that you can use for finding and closing on your first multi-family deal.
Tips For Finding Multifamily Properties
Remember that leads are always out there – The first thing to do when searching for multi-family properties is to know that the leads are always going to be out there.
This is important to remember because some investors may tell you that finding multifamily properties is difficult, but that’s simply not the case.
You can find a multi-family property in any city across the United States by doing the following:
- Driving for dollars – This is by far one of the easiest ways to find leads. It does require work, but if you plan properly, you can find multifamily leads, even in the hottest rental markets.
- Connect with local investors online – Use websites like Bigger Pockets to connect with local investors because they may know of available properties in their areas that are not currently listed.
- Hire a team of people in the local area to find leads for you – Every investor at one-point hires ‘bird dogs’, or people who know what properties to look for in a given area. Creating the right team of people on the ground requires effort but the results are worth it!
- Connect with a local real estate agent – Last of all, another way to find multifamily leads is to connect with a local Realtor®.
The most important thing that you need to do as an investor is to develop a strategy for the properties that you’re not looking for because once you start finding leads, it may be tempting to invest in a property that’s not going to be the right fit.
Ideally, you should ‘think like a renter’ and write down all of the things that you would want to have in a multi-family property. Some of the things that renters are looking for these days include on-site amenities, walkability, safety, security, a good school district, and a thriving local economy.
Practice Due Diligence – Once you find a multi-family property that you’re interested in buying, the first thing that you need to do is due diligence. This is important because you want to submit an informed offer, and not purchase something that could potentially be a huge waste of time and money.
If you’re unfamiliar with how to practice due diligence, simply follow this checklist to ensure that will give you the necessary steps required to invest in the right multifamily property.
#1 – Financial Audit – The first thing that you need to do before submitting an offer on a property is to conduct a financial audit of that property.
Your financial audit should include reviewing at least three-years-worth of the owner’s financials, including their bank statements, copies of profit-and-loss statements from the last several years, rent roll, deposit records, utility bills, and the owner’s tax returns.
#2 – Inspect The Condition Of The Property – You’ve never purchased a vehicle or another asset sight unseen in the past, so why would you purchase a multi-family property without inspecting the condition of that property?
Besides having the property examined, you should also have your inspector walk through each unit of the property to inspect those units for maintenance issues that may need to be addressed.
Hiring an inspector to review the condition of the property is important because you want to determine if that property has any deferred maintenance that the current owner has not addressed.
#3 – Market Survey – The third thing that you need to do before investing in a multifamily property is to conduct a market survey so you can find out what other comparable properties in the area are valued at and renting for.
What To Do After Closing On A Property
#1 – Have The Property Inspected Again – Once your offer has been accepted, you should have the property inspected again.
Having a second inspection is important because you never know what’s happened to the property since you last visited it.
One of the trees on the property may have fallen, or there could have been something as simple as a leak in one of the units that will require you to send out your maintenance team to fix that leak immediately.
#2 – Communicate With Your New Tenants – One of the most important things that you need to remember as the new owner of a multi-family property is that you’ve got to communicate with your tenants after your offer has been accepted.
Communication is important because, you want your tenants to see you as someone that they can trust and your tenants should have the freedom to feel like they can open up to you to tell you what’s going on with the property, especially if there are ‘nagging’ maintenance issues which were not fixed by the last owner.
If you take care of maintenance problems immediately and make the multifamily property feel like home, your tenants are going to be more inclined to renew their leases.
#3 – Get Started Immediately – Last of all, but most important, once you have the property inspected again, and communicate with your tenants, the next thing to do is to get started immediately.
Don’t put off dealing with problems because you want your tenants to see that the new ownership of the property is going to be different than the last owner and problems are resolved immediately.
Contact Trier Capital
Sourcing, acquiring, and managing multifamily properties can be a lot of work, especially if your goal is to do everything yourself!
Thankfully, there is a better way to own multifamily properties and that’s working with Trier Capital.
My company is a private equity firm that makes it easy for you to passively invest in lucrative apartment building syndications.
We do all the hard work to find and acquire ideal properties, and then oversee asset management after purchase, while our investors sit back, relax, and receive tax-advantaged passive cash flow.
Learn more about us by calling (630) 229-2383 or click here!