Choosing commercial real estate investing as an avenue to build wealth is a smart move. It also requires learning and using different strategies like thinking outside of the box to get the best deals for your investment dollars. Utilizing the services of an experienced and helpful broker sets the tone for future success when looking to purchase a multi-family property.

3 Investment Strategies to Buy Your Multi-Family Property

Consider these proven strategies to build your multi-family property investment portfolio:

1. Value-Add (BRRRR): This strategy seems to be the most commonly used by investors. True to the acronym, you will:
   • Buy a property that could primarily use some cosmetic updates.
   • Rehabilitate the buildings and units. You may apply some paint and spruce up the space or completely renovate it. Focus on those areas that tenants find the most valuable.
   • Rent out the apartments at higher rates. Again, hiring a leasing and management team can be vital in getting the return you hoped.
   • Refinance the commercial loan after stabilizing your asset with around 85% to 90% occupancy. At this point, you should have added significant value to the property and raised your net operating investment (NOI).
   • Repeat the process and grow your portfolio.
2. Opportunistic: This strategy is very hands-on and requires some patience. While the risk is on the high side, so are the rewards. Generally, cash flow is not the most significant concern as the success of this strategy lies in the sale or refinance of the investment real estate. You might see:
   • Heavy Value-Add opportunities require significant renovations where the property tends to be older and may be completely vacant.
   • Land Assemblage revolves around assembling multiple parcels of real estate into one tract. Developers see these tracts for significant development projects.
   • Land Banking is using your land as your bank. That is, you use your capital to purchase property instead of depositing it into a bank. As a result, there is very little or no income until you sell the land at a higher value than you bought it.
   • Land Development means investing in a property and envisioning a new way to use it. The land can be either developed or untouched.
3. Core: On the opposite side of the investment spectrum is a strategy that focuses on purchasing highly stable yet low-risk assets. These subcategories clarify these pristine properties:
   • Core Plus is a hybrid of core and value-add. Investors will find that less risky properties may still need some cosmetic improvements or a better property management or leasing team.
   • Stabilized Assets include real estate that is fully occupied and requires very little work. The returns can be low on these properties.
   • Trophy Assets are comprised of those buildings and properties with the best locations, high visibility, and easy access.

Partner with Experienced Multi-Family Property Brokers – The Estes Group

Choose to partner with a multi-family real estate broker who has the experience you need to find suitable properties for your financial goals. The Estes Group serves clients throughout the southern gulf states. We believe in an investor-focused approach to assisting you. If you want a company that keeps your best interests in mind, look to us. We help customers purchase multi-family property gems in Alabama, Mississippi, Tennessee, and Louisiana. Contact us today!

Call us at 601-362-9633 or contact us online to discuss your real estate goals with our knowledgeable and experienced investment property brokers. We’ll help with multi-family property purchases so you can reach your financial goals.

Choosing to add multi-family properties to your portfolio is an excellent choice. You can enjoy higher cash flow, increased portfolio value in less time, and lower investment risk. This option is easier to finance because of the steady cash flow you earn when you buy multi-family apartments; even when a unit is vacant. If you have the means to finance your new investment, you can get started now. But other times, you may want help to buy multi-family apartments. Do you know where to go for some outside financial help?

Obtain effective acquisition strategies for your next multi-family property purchase when you utilize the brokerage and transaction services of The Estes Group. We work with investors, investment companies, life companies, and lending institutions to help buy, sell, or lease their assets. Depend on us to give you the pros and cons of a particular property so you can make the best decision for your financial goals.

4 Ways to Finance a Multi-Family Property Purchase

Sometimes investing takes a little creative leveraging. Here are four avenues you might consider before you decide to buy multi-family apartments:

1. Equity Share Investors: This option utilizes another real estate investor’s money to purchase a multi-family property in exchange for a percentage of equity ownership. They will also receive a portion of the monthly cash flow and will receive a percentage of the profits when the property is sold. It is an excellent way to gain long-term passive income or a quick return on their investment from the sale.
2. Real Estate Syndication: Some investors will come together to provide financing for property investment. They come in a few different forms. One is through a partnership where someone joins in on funding a property. Both get something for their contribution. It might be equity, a return on the investment monies, or sharing in the responsibilities of owning and managing the real estate.
3. Hard Money Lenders: These lenders look primarily at the earning potential of an investment and not your credit history. You will want to do your homework if you consider this option over some of the others listed. The interest rates are higher, and the amortization period is much shorter.
4. Private Money Lenders: This may be the most challenging option to use, especially if the lender has no ties to the real estate investment arena. Many private money lenders include family members, friends, or community members with the means to provide the appropriate finances.

Fund Your Multi-Family Investment Property Purchase Wisely

Consider all your financing options before you make your next investment choice. Whether you want to lease, dispose, or buy multi-family apartments, the team at The Estes Group can help. We have the resources and contacts to find the right real estate investment and the options to finance them. Our client-focused mission ensures that we work with all of our clients to handle their portfolio in a way that meets their financial goals. Check us out and experience the difference outstanding customer service makes.

Call us at 601-362-9633 or contact us online to discuss your real estate goals with our knowledgeable and experienced investment property brokers. We’ll help you purchase a multi-family property that delivers the best return on investment.