Small multifamily properties (2–4 units) qualify for residential financing, can be owner-occupied, and teach you landlording at a manageable scale.
The numbers that matter
- Net operating income (NOI)
- Cap rate = NOI ÷ purchase price
- Cash-on-cash return
- Debt service coverage ratio (DSCR)
Look for value-add
Below-market rents, unused space and inefficient utilities are all opportunities. The best deals are often the ones that need a plan, not a miracle.
Reserve for the unexpected
Set aside at least 5% of gross rents for vacancy and 5–10% for maintenance and capital expenses.
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