Multifamily real estate is a great way to create wealth. Generally considered anything over 5 units, multifamily is always in demand, has very high returns, and the cost per unit for management and maintenance can be much lower due to economies of scale.
These are the most influential multifamily books that helped me get started.
1. The Complete Guide to Buying and Selling Apartment Buildings
by Steve Berges
Whether you’re a first-time real estate investor or a seasoned professional, The Complete Guide to Buying and Selling Apartment Buildings helps you map out your future, find apartment buildings at a fair price, finance purchases, and manage your properties.
Now revised and expanded, this Second Edition includes tax planning advice, case studies of real acquisitions, and appendixes that add detail to the big picture.
Plus, it includes a handy glossary of all the terms investors need to know, helpful sample forms that make paperwork quick and easy and updated real estate forecasts. With this comprehensive guide at hand you’ll find profits easy to come by.
2. The Perfect Investment: Create Enduring Wealth from the Historic Shift to Multifamily Housing
by Paul Moore
The American Dream has shifted…Not long ago, Americans were bent on home ownership. Most viewed it as one of their great life goals and their largest investment. No more. Almost overnight, the demographics have shifted. For an increasing number of Americans of all ages and backgrounds, renting is in, and homeownership is out.
Experienced commercial real estate investors know that the risk profile, returns, and tax benefits of large-scale multifamily are virtually unmatched. Unfortunately, access to these investments is unavailable to most investors. This volume provides investors with a clear path to minimize risks and maximize profits from this coveted asset class.
3. Multi-Family Millions: How Anyone Can Reposition Apartments for Big Profits
by David Lindahl
Multi-Family Millions offers expert advice for investors who want to make the transition from single-family homes to more profitable multi-family units. Successful real estate investor David Lindahl shows you how to find troubled properties that are ripe for quick profits, how to fix or flip those properties, and how to re-sell at maximum value. With a proven step-by-step system for managing each stage of the process, this book shows you how to get started in moneymaking multi-family units even while you work your day job.
4. Invest In Apartment Buildings: Profit Without The Pitfalls
By Theresa Bradley-Banta
I personally have met Theresa and she gave me her book. It was very good overall and an enjoyable read, unlike some other books which can be boring to consume.
Theresa Bradley-Banta’s Invest In Apartment Buildings Profit Without The Pitfalls is a no-holds-barred guide to successfully investing in multifamily properties. This Bradley-Banta compendium includes everything you need to know:
- The good deals and the “don’t go there” ones;
- Real estate investment exit strategies–and the fact that you must have more than one;
- Repositioning an apartment building (it’s a lot more than fixing it up);
- Negotiating the best multifamily real estate deals (let go of being liked);
- Understanding the real numbers and using them to your advantage; and
- The often ignored value of building a first-class team.
Theresa Bradley-Banta’s Invest In Apartment Buildings features tales from the real estate fast lane that only Bradley-Banta shares. It fills you in on the so-called “guru snafus”–the pitfalls that occur because investors follow the advice of the “gurus” of the moment–and lets you in on every aspect of the deal from start to finish.
Why Multifamily Real Estate?
There are a lot of reasons why you should choose to invest in multifamily instead of other types of real estate. Here is a quick list of why you should choose multi-family.
Economies of Scale
One awesome thing about multifamily is the idea of economies of scale. Essentially, by putting more and more units into one area, your costs will drop, allowing you to profit more.
Think about it this way – if you have a roof with one unit, it might cost…$5,000 to replace. A duplex will have a larger roof of course and it will cost more to replace, so perhaps it costs $8,000.
But, that is only $4,000 per unit.
A 3-family property might cost $10,000 to replace, or $3,333 per unit.
You get the idea. The more units per building, the lower the cost per unit.
One of my favorite aspects of multifamily is that the property can support on-site management. By having the management actually work at the multifamily location, you get better management, better tenants, and a better property.
Also, you have fewer headaches as the owner.
You’re Buying a Business
Multifamily is priced based on what it earns. This is completely different than smaller properties where you buy it based on what its neighbors sell for. So, if this property doesn’t earn much, you pay a lot less.
This leaves a lot more opportunity to add value and increase the cash flow.