Multi-Family Real Estate. It’s what’s for dinner.
Here at HBSB Holdings, LLC, we put a big focus on Multi-Family Real Estate Investment. Why? Multi-family real estate is very advisable for real estate investors that wish to build a relatively large portfolio of rental units. Acquiring a multi-unit apartment building is a lot easier and much more time efficient than purchasing that many different single-family homes. It is all about economies of scale.
HBSB Holdings, LLC acquires Multi-Family Real Estate opportunities in thriving markets within the U.S., which provide a value-add opportunity that enjoys great cash flow and upside potential.
Let me give you 3 reasons why multi-family real estate investing is a suitable option:
Reason #1: Growing a portfolio takes less time.
Multi-family real estate is very suitable for property investors who wish to build a relatively large portfolio of rental units. Acquiring a 20 unit or 400 unit apartment building is a lot easier and much more time efficient than purchasing the same amount different single-family homes. With the latter option, one would need to work back and forth with all the different sellers, and conduct inspections on all of the properties that are each located at a different address. In addition, in some cases, this route would also require an investor to open up that many separate loans for each property. All of this headache could be avoided by simply purchasing one property with multiple units.
Reason #2: More Expensive But A Lot Easier to Finance
In most cases, if not all, the cost to acquire an apartment building will be significantly higher than the cost to purchase a single-family home as an investment. A one unit rental could cost an investor as little as $30,000 while the cost of a multi-family building can go well up in the millions. At first sight, it may seem that securing a loan for a single-family property would be a lot easier than trying to raise money for a million dollar complex; but the truth is that a multi-family property is more likely to be approved by a bank for a loan than the average home. That’s because multi-family real estate consistently generates a strong cash flow every month. This remains the case even if a property has a handful of vacancies or a couple of tenants who are late with their rent payments. If a tenant, for example, moves out of a single-family home, that property would become 100% vacant. On the other hand, a multi-unit property with one vacancy would only be partially unoccupied. As a result, the likelihood of a foreclosure on an apartment building is not as high as a single-family rental. All of this equates to a less risky investment for a lending institution, and can also result in a more competitive interest rate for the landlord.
Reason #3: You’re In a Position Where Property Management Makes Financial Sense
There are some real estate investors who do not enjoy the actual management of their properties, and instead, hire a property management company to handle the everyday operations of their rentals. The property manager is typically paid a percentage of the monthly income that a property generates, and their duties might include finding and screening tenants, collecting rent payments, handling evictions, and maintaining the property. Many investors who own one or two single-family homes do not have the luxury of contracting an external manager because it would not be a financially sound decision due to their small portfolio. The amount of money that multi-family properties produce each month give their owners room to take advantage of property management services without the need to significantly cut into their margins or upside. The economy of scale is a no-brainer here.