What is Multifamily?
In real estate, Multifamily refers to multiple dwelling units in one building or several buildings in a complex in which several tenants or owners reside. There are several types of Multifamily properties, but first, here is the distinction between Single Family and Multifamily residences and how they are categorized in the real estate industry.
Single Family Residence (SFR)
The SFR one dwelling unit in which one owner or tenant resides, but may include several inhabitants of one family. In the industry, an SFR falls in the category of Residential real estate. Residential real estate includes 1-4 unit dwellings. While 2-4 units are technically Multifamily, they remain in the Residential industry category and are often referred to as Income properties.
As mentioned above, these are multiple dwelling units, most commonly known as apartments. Any dwelling that is 5+ units is a Multifamily and falls in the industry category of Commercial.
For simplicity sake, here’s how to distinguish between the two:
Single Family Residence, 1 unit, Residential
Multifamily Residence, 2-4 units, Residential
Multifamily Residence, 5+ units, Commercial
There are several Multifamily dwelling types, and while this is not the complete list, these are the most common today:
As an investment type, Multifamily is one of the most sought after assets for new and seasoned investors seeking to realize regular cash-flow and high profits for a short hold period.
To find out more about Multifamily and investing in this asset , visit my Blog category, Multifamily. If you are a new, Sophisticated, or Accredited Multifamily Investor and are seeking representation, guidance, and support with your Multifamily Investing Plan & Strategy, contact me today at 310-383-7393 or firstname.lastname@example.org.
Multifamily Investing Tip
- First and foremost, before you invest in any property, know your Market Statistical Area (MSA) and then research the submarkets: cities and neighborhoods. This will save you a lot of time and ensure you are putting your capital into assets that have the strongest potential to perform to meet your risk tolerance and minimum returns.