Getting started with rental property investing often begins with a small single-family home or duplex. But expanding into larger multifamily properties like apartment buildings can supercharge your portfolio.
The more units you manage, the greater the cash flow, appreciation gains, and overall returns. If your goal is to accumulate apartment assets, here are key tips for increasing the number of units under your ownership.
Start Small and Scale Up
You don’t have to begin by acquiring a 100-unit complex. Consider starting with a small 4–8-unit apartment building instead.
This allows you to get experience with multifamily management on a smaller scale before graduating to larger properties.
As you demonstrate the ability to run these small assets well, it becomes easier to take on more units later. Be patient and move up cautiously over several years.
House Hack 4-Plexes
One smart way to enter multifamily investing without a ton of capital is to house hack a small apartment building.
For example, purchase a 4-plex, live in one unit yourself, and rent the other three out at market rates. This strategy allows you to afford the mortgage using the rental income while living rent-free.
Stack up cash flow for a few years, then use it to make a larger down payment on your next acquisition.
Finding good partners can give you access to more capital and more manpower to take on bigger apartment projects. Join forces with other investors to pool your money together for larger down payments.
Or partner on the management responsibilities—you oversee maintenance while your partner collects rent and handles finances. There are many creative ways to leverage partnerships to increase units.
Refinance After Appreciation
If you already own a smaller rental property that has appreciated nicely, consider refinancing and pulling some cash out to redeploy into another building.
Multi-unit prices in many markets have gone up 20%+ over the past two years.
If you have enough equity, you can tap it to acquire another asset without as much out-of-pocket cash. Just be sure to get a competitive rate and reasonable terms.
To purchase larger apartment buildings usually requires specialized commercial real estate loans beyond what local banks offer.
Connect with multifamily lenders to get access to this capital.
For example, agency loans through Fannie Mae or Freddie Mac are an attractive option. Bridge loans and debt funds are also popular. Having these lending relationships is key to scaling up the number of units you can obtain over time.
In conclusion, accumulating apartment buildings takes patience, partnerships, and capitalizing on equity when possible.
But the high rents, stable cash flow, and appreciation make multifamily properties one of the smartest sources of passive income an investor can find.
Start small if needed, but always keep the mindset of scaling up over time. With the right financing and management plan, you can turn a few units into an empire.
Gain more insights by signing up for our Live Multi-Family Millions Boot Camp.