Multifamily Rentals: Great For First-Time Property Investors

Multifamily rentals are becoming the “Go to” properties of choice for commercial real estate investors. Whether people are just looking to supplement their income, or dive completely into commercial real estate, multifamily rentals are a great way to start.

Multifamily Rentals Come In All Sizes

Multifamily rentals can range from a standard duplex house on up to large apartment buildings. For those starting out in commercial real estate, purchasing a rehab project and converting it into a multifamily residence is usually the least expensive investment. Many people, such as the Property Brothers of HGTV fame, started out buying houses and renting them out as multifamily dwellings. Part of the income from tenants would go toward paying off the mortgage and the other portion would go into the bank. Even today, people in or just out of college are building small commercial real estate empires by purchasing, renovating, and renting multifamily housing.

Constant Income

Having properties with multiple units not only increases the revenue generated, but the offer a buffer during periods of vacancies. Not everyone stays in the same place. Tenants move for various reasons. However, unlike single family rentals, when one unit is vacant in a multifamily residence, the cash flow does not grind to a halt. The rent from the occupied units offers a financial buffer until he empty units are filled.

Owner Occupied Multifamily Rentals

When the property owner lives in one of the units of a multifamily rental, it opens up doors to financing and tax benefits. There are special loans available to owner occupied multifamily rentals, most prominently from the Small Business Administration (SBA). When a property owner occupies a multifamily rental, improvements, repairs, and general maintenance can be claimed as tax deductibles. Just remember to keep all receipts for products purchased for repairs and improvements, because the IRS will require them to back up the claimed deductions.

Financing Multifamily Rentals

Getting the right financing for multifamily rentals can be challenging, especially if you are making your first acquisition. Banks usually have prohibitively high requirements for independent property investors, and the red tape involved can cause people to miss out on time-sensitive opportunities. As an alternative, BG Capital Funding Group offers a number of financing programs which can be customized to fit your needs. We can also sidestep the bureaucracy of bank loans and get financing processed quickly and efficiently. Whether you need SBA loans for owner occupied properties, or something for larger multifamily projects, we can help. Contact our offices today to learn more.


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