Buying Apartments

Once you’ve bought a few homes, you may find yourself looking for the next big move in real estate. For many investors, that next step is transitioning from single-family homes into multi-unit properties or even apartment complexes. Multi-units can help you scale faster, generate stronger cash flow, and diversify your rental portfolio—all in one purchase.

The Appeal of Multi-Units

Owning a property with multiple doors under one roof can be a game-changer. Instead of managing several single-family homes scattered across different neighborhoods, you centralize your investment into one location while still benefiting from multiple rental incomes. This also helps reduce vacancy risk—if one tenant moves out, you still have others covering expenses.

Financing 2–4 Unit Properties

Properties with 2–4 units are considered residential by most lenders, which gives you more flexibility in financing.

- Conventional Loan: Minimum 20% down payment for investment purchases.

- FHA Loan: As little as 3.5% down if you plan to live in one of the units (owner-occupied).

This makes duplexes, triplexes, and fourplexes an attractive option for investors who want to get into multi-units without crossing into commercial lending.

Financing 5–8 Unit Properties

Properties with 5–8 units step closer to the commercial world, and lenders usually require a larger down payment. In most cases, you’re looking at around 30% down. While this is a higher entry cost, the upside is that you’re getting stronger cash flow potential and positioning yourself for larger-scale investing.

Benefits of 5–8 unit properties:

- Bigger monthly income potential compared to small multi-units.

- Still more accessible than large apartment complexes.

- A solid stepping stone into commercial real estate investing.

If you’ve already mastered single-family homes, moving into multi-units could be your next level of growth. Start with 2–4 units to keep financing simple, then consider 5–8 units when you’re ready to scale with bigger cash flow—even if it means a larger down payment.

Real estate investing is about progression. The key is to take the right step at the right time, using your experience and financial strength to keep building.