Investing in Multi-Family Units

Posted by on Wednesday, February 11th, 2015 at 11:29am.

This week RE/MAX of Boulder radio talks about multi-family units and what you need to know about making these kind of investments.  To get all of the facts straight, Duane Duggan hosts Kyle Malnati with Malnati Properties.  


The multi-family market has been doing quite well in the past few years and has been especially strong in the last year.  There has been a huge jump in average price for each unit between 2013 and 2014 and now it is noted that there is a shortage of inventory on the market in the Denver area.  In addition,  it appears that most transactions are happening off the market.  In this kind of market, Malnati advised us, it is important to keep alert for properties on the market and off the market but for different reasons.  


This episode explains how buying multi-family units bridges the gap between commercial and residential real estate.  In fact, if a buyer is going to buy a property with over 5 units it is then financed as a commercial property.  However,  contracts on multi-family properties are no more complicated than contracts on residential properties.  The biggest difference is the cost and the timing.  


Malnati and Duggan also discussed many of the concerns involved in this type of real estate purchase.  The advice they give is that this is a long term investment and it will take a lot of time and effort before a buyer will reap all the benefits.  That being said, there should be some cash flow right from the beginning.  If a buyer thinks they will just break even, they might want to reconsider making that purchase.


Other topics discussed on this week’s episode include expenses and insurance when it comes to multi-family units.  down payments, mortgage rates, and trends in vacancy.  To learn more listen to the full recording at www.boulderco.com.

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