When buying multi-unit properties, should I buy a duplex fourplex or a 16-unit property?
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Good question!
Out of these options, the correct choice is the 16-unit property. However, this still is not the correct choice out of all options not listed. 16 rent checks are better than 2 rent checks or 4 rent checks.
The hidden jewel or diamond that many investors miss is being a limited partner in a large (more than 100 unit) apartment complex community.
For example, you find an experienced apartment complex/community investor buying a 30 million apartment complex with a contract to purchase already signed.
This investor already has been to the bank and obtained a 20 million loan but he still needs the down payment money and CAPEX money. You simply invest with his group as a limited partner. You would invest 100,000 minimum (typically) to as much as 1,000,000+
The beauty of this is once you invest you don’t have to do anything and typically in 3 to 7 years you get your money doubled. During the holding period you also typically get distributions depending on how the deal is structured.
It is much easier than getting on the front line with tenants and toilets or trying to have a property manager interface with you and the tenants. Most people are not aware this option exists.
You do have to know an apartment complex investor that is buying large multifamily. These sorts of investors already have a base of investors they work with so you want to find them and approach them in the right way.
You just let them know you like what they are doing with investing in these other apartment complexes and you hope on their next deal they will let you invest.
I hope that helps and good luck with your investing!
Benjamin Z Miller
The Benjamin Z. Miller Organization
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