At first, buying a multifamily home complex may seem like nothing more than finding a property and signing a sale contract. In reality, when it comes to buying and owning a multifamily home complex, there are many other steps required to make for a profitable investment.
In the world of multifamily real estate, a multifamily property can mean anything from an apartment complex to a townhouse complex to a du-, tri-, quad-plex or more. For the sake of this article, we’ll be referring to townhouse complexes when saying “multifamily property.” For information about buying apartment complexes, click here.
So, what exactly does buying a multifamily home property entail? The professionals at CTG Real Estate Services can answer this question and more when you contact our company today.
What is Involved in Buying a Multi-Family Property?
When investors look to buy multifamily property and lease it for a profit, they need to understand the additional responsibilities associated with this process. Buying a multifamily property by itself will bring a profit, but the financial advantage is to be found when investors take the time and money to renovate and upgrade a lower-class multifamily townhouse complex. In turn, they can charge higher monthly rent and more quickly recoup their investment.
Therefore, before you decide to purchase a multifamily property, you must be ready for the process of renovation (if purchasing a value-add property), vendor contracting and property management (either yourself or through hiring an appropriate professional). This will all add costs to your original purchase budget that you need to be aware of and prepared for.
In general, here are the steps you may need to take after owning a multifamily home property:
- Construction and renovation
- Addition of attractive amenities, like gyms and swimming pools
- Hiring maintenance management teams
- Choosing utilities providers
- Finding a property management company
- Creating long-term capital and facilities plans
Remember, when buying a townhouse complex, you will likely need to rent out your properties for the best investment return. Selling individual properties will not bring in monthly rent.
How to Purchase Multi-Family Properties
Ready to move forward with buying multifamily home properties? There are a few steps you will need to take:
1. Determine Your Asset Criteria.
Your asset criteria are the aspects that will determine what kind of real estate property you will search for — and how to buy a multifamily property that is best for you. When determining your asset criteria, ask yourself these questions:
- Where do you want to buy a multifamily property? How will that location play into the marketability of your business? What local amenities will you desire?
- How many units do you want in your multifamily property?
- What is your desired monthly rent rate?
- What is your monthly budget for maintenance and upkeep?
- What existing amenities do you want your property to have? What amenities do you want the potential to add in the future?
- What is your budget for purchase of the building?
- What is your desired capitalization rate?
- What is your ideal desired tenant?
Once you have these basics, you (and your real estate company) can start searching for the right multifamily property for your goals and needs.
2. Hire a Real Estate Company.
So, why should you work with a real estate company when buying a multifamily home property?
While you can buy multifamily property on your own, you will generally have a harder time finding the right properties for your asset criteria. Working with a real estate professional like CTG Real Estate Services, on the other hand, will give you access to hundreds of listed and unlisted properties, which may be available at a lower price and with less competition from other prospective buyers. Your real estate company will evaluate your asset criteria and quickly identify potential real estate properties for your goals and needs.
3. Find a Space and Sign the Sale Contract.
Once you and your real estate professional have identified a potential space for your asset criteria, you will move forward with the legal process of negotiating and signing a sale contract. This must be done with a proper real estate attorney. Many times, a prospective seller will have legal representation in mind. If they don’t, your real estate company should be able to refer you to a trusted real estate attorney.
Once negotiations are complete between you and the seller, your attorney will draw up a sales contract and locate a title company, and the deal will be finalized with your signatures.
But, this contract should not be the end of your process of buying a multifamily property and preparing it for lease.
Let CTG Real Estate Services help with the rest.
How CTG Real Estate Services Can Help
Unlike other real estate companies, CTG Real Estate doesn’t walk away once a final contract is signed. If our client desires, we will assist them through the process of renovating and preparing their new multifamily property for long-term success. How? With our unique turnkey solutions.
Once you buy multifamily property, there are a few steps that need to be taken care of. No one knows them better than our CEO and founder Chris Gardner. He’s been in your shoes as a business owner and will work closely with you to create a multifamily property that meets your goals. With CTG Real Estate Services, your needs will always come first.
Not only does our team have unparalleled access to listed and unlisted multifamily properties, but we also have access to trusted professionals for each step of your preparation process. We can help you find the general contractors, architects, designers and property managers you need to maximize your leasing profit from your property.
Interested? Schedule a consult with our team today to learn more about how to buy a multifamily property that will meet your goals and desires.