Buying a multifamily property has the potential to bring you a huge return in the long run. Of course, in order to make a purchase and start collecting rent from tenants, you will need to have the financing in place to purchase a property (unless you happen to have enough cash on hand). Assuming you are planning to finance your purchase, three types of financing for this kind of investment are listed below.
#1 – Visiting the Bank
This is where most people will start. After all, what do you usually do when you need a loan? You head to the bank, of course. And, to be fair, it is possible to finance a multifamily building purchase through the use of a bank loan. However, bank loans can be difficult to secure, and they can take a significant amount of time to close. If you don’t have what they are looking for in terms of credit and investment history in order to close the loan, you’ll likely be turned away. Also, if you need to move quickly, finding a partner that is going to understand the urgency of your situation is important.
#2 – Paying Cash
Of course, you can always just pay cash for a real estate purchase. This is the easiest option, without a doubt, but it is also one which is out of the reach of most people. If you are trying to purchase a multifamily property valued at over $1 million, are you just going to be able to write a check? Probably not. Cash is a great way to go if you have the means to pull it off, but that will not be the case for the vast majority of investors.
#3 -Turning to a Private Lender
For many people, the winning option here will be to work with a private lender who can offer flexible terms, a quick turnaround time, and no hidden costs. This is a particularly good option when looking at multifamily financing, as the red tape that you need to work through in order to close the loan should be significantly reduced as compared to a traditional bank. Working with a private lender can help you take the next step in your investment experience, as you may find that you have access to money faster and easier than ever before.
Choosing the right multifamily property for your family or even just as an investment solely depends on what you want to achieve in the long run. For Family residential purposes, chose the right property that can accommodate all your family, their needs and you also have to consider the location as well as the pricing for each type. For Investment purposes, chose based on your plans, research and budget. Location will be a key factor in choosing the right multifamily property to invest in. The three types of multiple financing rates above can definitely help you today or in the future. But of course, extensive research and advice should also be consider, there are a lot of professional people or firm that you can reach out for help.