How to Choose a Multifamily Realtor | BiggerPockets Blog

Multi-family properties are among the most popular types of housing that investors rely on to grow their investment portfolios. They provide a steady and reliable income, have a relatively low vacancy risk, and usually increase in value over time.

Working with a multi-family real estate agent is smart if you are thinking of investing in this type of property. These professionals can help you find what you’re looking for in less time and possibly help you save money during negotiations.

Why do I need a multi-family realtor?

Not all real estate agents are experts in all types of real estate. Some specialize in helping families find their forever homes, while others may specialize in selling homes. Agents who specialize in multi-family properties are investment experts. Some may be involved in multi-family real estate investing for themselves.

Working with an agent who specializes in multi-family properties has several important benefits. First, a good agent will help you save time by narrowing your search to properties that are good investments. Your agent will review all multi-family home listings, identify properties that meet your criteria, and find net operating income, rental history, financial projections, and other important information.

The multi-family estate agent will also be an expert in the local market and will have contacts with property owners, developers and other investors. Your agent might know, too Multi-family properties off the market It will be put up for sale soon, which will give you a competitive edge over other investors. The agent may also know local property managers who are reputable.

A good family agent will also schedule tours and accompany you when visiting properties. The agent will know what questions to ask to help you make an informed buying decision. The agent will also assist you in conducting a thorough analysis of the property and evaluating investment risks and potential returns.

One of the greatest benefits of using a multi-family real estate agent is that it can help you save money. Your agent will help you craft an offer and work on your behalf to ensure you get the best deal possible. Your agent will also arrange inspections and assist with paperwork to ensure a smooth transaction.

Understand the different types of multiple family characteristics

There are many different approaches you can take with multi-family real estate investing. The best approach for you will depend on your investment experience, risk tolerance, and how fast your investment portfolio is growing.

There are three types of multi-family properties, and it’s important to carefully consider the pros and cons of each type before making an investment decision.

Residential complexes

When people think of multifamily properties, Residential complexes They are often the first things that come to mind. The demand for flats is usually strong and they are usually rented by college students as initial housing, by those looking for temporary housing, and many more. Apartment complexes usually consist of two or more buildings with multiple units.

The primary advantage of this type of property is the diversification of occupancy. With single-family homes, for example, you won’t make any money on non-rental property. The monthly note will still be payable; You may have to pay it out of pocket until you find a tenant. On the other hand, a vacancy in an apartment complex with dozens of units may not be financially crippling and can help you increase your cap rate.

An important negative factor for apartment building complexes for investors is that they cost significantly more than other properties, such as single-family homes. You can use creative financing strategies to finance apartment building complexes, but it may scare off many new investors with such a huge investment and constant maintenance requirements.

Turnkey properties

a Turnkey property Any rental property that has been recently renovated and does not require any additional modernization or repairs. They can be single-family homes, apartments, or something else. These properties will also have existing tenants and could be managed by a property management company. As the name suggests, the property is ‘turnkey’ for the investor.

The primary advantage of investing in a turnkey property is that the rental income starts immediately after closing. Although all rental properties will require ongoing maintenance, major problems will most likely be identified and fixed. The property will also not need any immediate cosmetic improvements, which is important for long-term investors.

An important negative factor in finished properties is that they may sell at a premium to other properties. They are usually sold by the investors who bought them Fix and flip for profit. However, ready real estate may still be a great option for those with full-time jobs and want to break into real estate investing.

Duplex, triple and four floors

Duplex, triplex, or quadruple floor is a multi-family property with 2-4 units in one building. The duplex has two rental units, three floors have three, and four floors have four.

Many people prefer these properties because they allow them to grow their investment portfolios one property at a time, which reduces risk. It is also ideal for those who are new to real estate investing. Instead of buying a large multi-family property with dozens of units, a new investor can buy a duplex and then consider buying another one after gaining experience and confidence.

An important disadvantage of this type of property is that you may end up with multiple properties that are not close together. Driving from one property to another to address maintenance issues or show units to potential tenants can be inconvenient.

Do your research: Learn about the neighborhoods and choose a location

Buying multi-family units is one of the most important decisions you will make. Before you choose a property, it is important to make sure that there is a huge demand for rental housing in the area and that your investment will increase over time.

First, it is important to consider local demographic data and the local economy. You can use online resources to find crime rates, school ratings, and the unemployment rate, which will help you decide if the community you are considering is the one you want to invest in.

After that, it’s a good idea to visit the community you’re considering to see them in person. Check local amenities to ensure they are close to the property you are considering. Also, don’t forget to explore the surrounding area to get a feel for it and to make sure it’s family friendly.

When you visit a community, take the time to talk to some of the locals. Tell them that you are considering buying property in the area and ask them if they would like to live there. They may give you important information that you wouldn’t get by searching online or from other sources.

Finally, you will also need to assess the local rental market by analyzing rental demand, vacancy rates, and rent estimation trends. It is also important to know if there are any planned infrastructure projects or new business developments. A new distribution warehouse or factory that employs many people can greatly increase the demand for local rentals, allowing you to increase your rates and increase your cap rate.

How do I find a good multifamily realtor?

Before purchasing a multi-family property, it is important to find the right agent. The person you choose will help you find the best investment property for your needs and ensure a smooth transaction. It’s not hard to find multi-family agents, and there are a few simple strategies you can use to help you narrow your search.

The first thing you can do is ask for referrals from other real estate agents. Make sure they know that you are specifically looking for someone who specializes in multi-family properties. After getting some recommendations, you can check out any reviews and ratings you may have received from others on online real estate platforms.

The next step is to talk to each of the agents you have selected to make sure that you are compatible and that they understand your investment goals. You can talk to them or arrange a short personal meeting. Since you will be working closely with your agent, you will want to make sure that you are comfortable communicating with the person of your choice.

What Characteristics to Look for in a Multi-Family Realtor?

Any real estate agent you consider should be an expert in multi-family housing. Before choosing an agent, there are three important characteristics to ensure that you get someone who knows the market and your investment needs.

They should be local experts in the area

When considering agents, ask them about their experience with multi-family investing, their track record of successful client transactions, and their knowledge of local markets. A good agent can tell you which communities have the strongest rental demand, the best economies, and a positive long-term outlook.

They must be qualified experts in multi-family properties

It is also important to consider professional certifications before choosing an agent. Be sure to look for a multi-family real estate investment certification such as Certified Commercial Investment Member (CCIM). This will help ensure the agent you choose is up to date with industry changes and committed to professional development.

They must be trustworthy enough to take care of your investment criteria

Some agents will have more experience than others. A review of their records and experience will help you avoid agents who are new to investing in multi-family properties, working as part-time agents, or specializing in commercial real estate as well as other types of real estate.

questions and answers

Before choosing an agent, it is important to ask the right questions to determine if the agent has the expertise, connections, and expertise you need.

What questions should you ask your multi-family real estate agent?

Talking to several real estate agents who specialize in the multi-family market is a great way to find someone who is easy to get along with and knowledgeable about the local market. Here are some important questions to help you decide whether you and a business agent are a good fit for you.

  • Do you personally invest in multi-family homes?
  • How long have you been living and working in the area?
  • Can you provide references from previous clients?
  • Can you recommend some good property managers?
  • What strategies do you use in negotiations to get the best deals?
  • Can you share information about some recent multi-family deals?
  • How long have you been working as a multi-family real estate agent?
  • How would you rate the property’s rental income, growth potential, and risks?

What is the normal commission for a multi-family real estate agent?

As a general rule, commissions for multi-family real estate agents are typically 4-6% of the sale price and will vary based on various factors. For a large real estate investment, the commission may be negotiable. It’s another important question to ask when you’re considering agents. Factors that may contribute to the agent’s commission include the location of the property, its market value, the experience of the agent, and the level of service provided.

bottom line

If you are considering investing in multi-family properties, ensuring that you work with the best agent is not optional. The person you choose will be an important business partner who cares about your interests. Your agent will work closely with you to find the right property, select the right type of loan, negotiate the best deal, and do other things to ensure a smooth purchase.

Fortunately, finding the perfect multi-family real estate agent has never been easier when you use it BiggerPockets proxy finder. With the easy-to-use tool, you just need to enter the city or zip code you are considering and your investment criteria. You will then be matched with a local agent who can help you find the best investment property for your needs.

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Note by BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.