In this article:

10 Steps to Your First Small Multifamily Deal

Picture of Author: Rod Khleif

Author: Rod Khleif

Top Real Estate Mentor, Best Selling Author, Host of #1 Real Estate Investing Podcast

Why Small Multifamily?

Think 2‑ to 30‑unit buildings. They’re usually run by “mom‑and‑pop” owners, so rents sit below market, maintenance is behind, and seller financing is common. Competition from big buyers is almost zero, giving you room to negotiate and add value fast.

Steps to Your First Multifamily Property

1. Audit Your Finances

Spend a weekend gathering bank statements, credit scores, and tax returns. List every funding source—cash, HELOCs, 401(k) rollovers—plus how quickly you can tap each one. Meet a local lender to confirm what you can borrow with FHA, conventional, or commercial terms. Tighten weaknesses now so you can close decisively later.

2. Pick Your Lane: Residential or Commercial

  • 2–4 units (residential) → House‑hack with 3.5 %‑down FHA loans and 30‑year fixed rates.

  • 5–30 units (commercial) → Property value follows NOI ÷ Cap Rate. Improve operations, force appreciation, and refinance equity out.

Choose a lane first; everything—underwriting, financing, exit plan—flows from that decision.

3. Select One Promising Market

Narrow your hunt to one or two metros. Look for:

  • Job & population growth

  • Diverse employers (so one closure won’t tank the area)

  • Rising median income

A healthy market forgives rookie mistakes and multiplies every operational win.

4. Lock In Two Key Partners

  1. Multifamily broker who closes off‑market deals.

  2. Relationship‑based lender who funds small complexes.

Strong relationships close more deals than the deepest pockets.

5. Warm Up Future Investors

Build a spreadsheet of friends, colleagues, and family who could invest $25k–$250k. Meet for coffee, learn their goals, and keep them updated. Trust earned now speeds funding when you find a slam‑dunk deal.

6. Look Like a Business

Secure a professional email, Google Voice number, simple website, and (when you’re ready) an LLC. These low‑cost steps show brokers and sellers you’re serious—not a hobbyist.

7. Build a Property & Owner Database

Pull county records or paid lists to capture every small‑multifamily property in your target area. Track owner names, phone numbers, last sale date, and any code violations. Organized data turns into targeted mailers and focused follow‑up calls.

8. Mail First—Digital Later

Mom‑and‑pop owners read letters, not TikTok ads. Send a friendly, hand‑addressed note three times over 90 days. One student mailed 300 letters and landed a 32‑unit deal that nets $10k a month. Old‑school still wins.

9. Add More Deal Pipelines

While mailers work, also:

  • Drive for dollars (look for overgrown lawns or peeling paint)

  • Watch online & courthouse auctions

  • Set Craigslist and Facebook alerts

  • Network with wholesalers

Multiple funnels smooth out the feast‑or‑famine cycle.

10. Underwrite Until It’s Second Nature

  • 2–4 units: Value = similar sales within ½ mile.

  • 5+ units: Value = NOI ÷ Cap Rate.

    Run practice deals daily. Test what happens if rents come in 5 % low or expenses 10 % high. Speed and certainty win offers—hesitation kills them.

Final Word

Small multifamily isn’t complicated, but it rewards disciplined execution. Audit your money, choose one market, assemble a lean team, and act every day. Follow these ten steps and you’ll move from dreaming about cash flow to depositing it.

Block one hour today, pick your market, and draft your first mailer. Momentum loves speed—let’s go get your first deal!

About the Author: 

Rod Khleif

Founder of The Lifetime Cashflow Academy, The Multifamily Bootcamp, and Warrior Program

Rod is a seasoned real estate investor, mentor, and philanthropist. He has owned and managed thousands of single and multifamily properties and is the host of the top-ranked “Lifetime Cash Flow Through Real Estate Investing” podcast. Rod is a best-selling author and one of the most trusted voices in the multifamily investing space. He’s been featured in major publications and has helped thousands of students achieve financial freedom through real estate.

Follow the expert: 

Want to create Lifetime Cashflow?

Join me at my Multifamily Bootcamp and I’ll show you how.

About Rod Khleif

Rod Khleif is a best-selling author, speaker and philanthropist, and the host of the top-ranked Lifetime Cash Flow Through Real Estate Investing podcast. He is widely regarded as one of the nation’s leading experts in multifamily real estate and has helped thousands build financial freedom through real estate investing.

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