Multi-family properties can be a lucrative investment in Florida.
Before investing in a multi-family property, you will have to carefully plan everything out for the greatest chance of success in the short and long term.
At minimum, you will want a team with an accountant, lender, and South Florida real estate attorney to help you make the right decisions and guide you through each step of what can be a lengthy process.
Below are some tips to help you succeed on your next multi-family property deal:
Ask for Paperwork
You’ll want highly detailed paperwork as you get started with any potential multifamily property purchase. It will help you determine whether or not the property is a viable investment with important numbers like the cap rate, gross revenue, and estimated net profit per year.
Ask for copies of leases, rent rolls, payment histories, maintenance records, and anything else that you can obtain for any potential property that you are seriously interested in.
It can also be helpful to speak with tenants directly if this is a possibility to learn about any overlooked issues, especially if you are getting closer to finalizing a deal.
Know What Class The Property Is
Multifamily properties can be described in 4 classes: A, B, C or D. “A” represents the best condition for the property and “A” class properties are likely to have steadily paying tenants and are located in the safest neighborhoods, along with being the most modern and requiring the least amount of repairs. These are also typically the highest priced properties on the market.
“B” through “D” class properties will have greater maintenance requirements and may have more difficulties with property management. Your choice will depend on several factors; it doesn’t mean that “B” through “D” class properties aren’t viable, but you will have to carefully consider the advantages and disadvantages of each option.
Consider Hiring a Property Management Company
Property management companies will deal with many of the headaches that you would otherwise have to deal with. They can collect rent, deal with repairs, late night emergency maintenance requests, and much of anything else.
Consider hiring a property management company to deal with these requirements to save you time. They will typically charge anywhere between 3 to 10 percent of the monthly rents that you bring in. It can allow you to reap the benefits of owning a multifamily property without dealing with many of the downsides, if you have the budget.
No matter what, you’ll want to meet with an experienced real estate attorney in South Florida prior to closing on any deal, and for assistance with due diligence. Contact Schecter Law today at (954) 779-7009 for any questions you may have about investing in a multi-family property in Florida.