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
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2–4 units (residential) → House‑hack with 3.5 %‑down FHA loans and 30‑year fixed rates.
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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:
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Job & population growth
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Diverse employers (so one closure won’t tank the area)
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Rising median income
A healthy market forgives rookie mistakes and multiplies every operational win.
4. Lock In Two Key Partners
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Multifamily broker who closes off‑market deals.
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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:
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Drive for dollars (look for overgrown lawns or peeling paint)
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Watch online & courthouse auctions
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Set Craigslist and Facebook alerts
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Network with wholesalers
Multiple funnels smooth out the feast‑or‑famine cycle.
10. Underwrite Until It’s Second Nature
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2–4 units: Value = similar sales within ½ mile.
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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!