Buying and selling multi-family properties is considerably more complex than dealing with single-family homes. And that’s mostly because, typically, it involves a lot more people – the many tenants in the multi-family property. Add to that the financing and ROI challenges, and you can see that investing in multi-family properties is no small undertaking. To help you out, here are our top tips for buying and selling multi-family properties in Cleveland.
Buying Multi-Family Properties in Broadview Heights
Buying (as well as selling) multi-family homes in Cleveland is a different animal from investing in single-family homes. Success in investing in multi-family properties includes:
DETERMINING PROFIT POTENTIAL
The first step in buying and selling multi-family properties involves determining how much profit potential a particular property affords. You can do that by finding your 50% – the difference between expected income and expenses. Calculate the expected income and then cut it in half to determine approximately how much a property will earn you, which is that remaining 50%.
CALCULATING CASH FLOW
You also need to determine your monthly cash flow – that is, how much cash you will actually pocket each month from a potential multi-family housing. You can arrive at a cash-flow estimate by subtracting the amount of the monthly mortgage payment from the net operating income.
FACTORING IN THE MAJOR CONSIDERATIONS
Next, for buying multi-family properties in Cleveland, you will need to carefully consider the major impacting factors:
- potential Income and Cash Flow – We’ve already touched on these, but their importance can’t be overstated. A potential multi-family property must have the potential to provide ample cash flow along with both short- and long-term income. (Your real estate agent can help you with these sometimes difficult calculations. To find out more, call (440) 628-1321.)
- Location – As with any kind of real estate, location is paramount. A multi-family property is a good investment only if its location will appeal to renters. Generally, this means high-growth and high-yield areas with safe, well-maintained neighborhoods.
- Number of Units – A final consideration is the total number of units. It is generally recommended that neophyte investors begin with properties with fewer units – such as duplexes, triplexes, and four-plexes – because they are more affordable and present less risk.
Selling Multi-Family Properties in Cleveland
Selling multi-family properties in Cleveland can be pretty tricky because there are often people living in the units at the time of sale. So you need to keep in mind the following:
REVIEW OCCUPANCY, LEASES, AND TENANT RIGHTS
You certainly don’t want to wind up in legal hot water when selling multi-family homes in Cleveland simply because you weren’t aware of the legal issues involved. So be sure and take the time to review the leases and study up on tenant rights. (Again, your agent can be a true asset in this regard. Call or text (440) 628-1321 to find out how.)
PREPARE THE PROPERTY
As with selling any kind of real estate, selling multi-family properties in Cleveland will involve a good amount of preparation. Because multi-family properties are almost always purchased as investments, they must look like a good investment, having the appearance of being regularly and well maintained. Besides the interior of the units, your prep work will include:
- Curb appeal
- Common areas
- Parking lots/areas
- Doors and locks
INSPECT BEFORE LISTING
It’s always a good idea to have the required inspections completed before listing multi-family, especially if your municipality requires a certificate of occupancy (C of O). Having the inspection completed before the listing can cut down on the chances of closing being delayed. The primary reason you should do this is that it gives you a chance to fix any problems before the buyer sees them.
Hire an Agent with the Right Experience
Finally, because selling multi-family properties in Cleveland is more involved and more complex than other real estate transactions, it’s recommended that you hire a local agent with experience in multi-family properties. But you do need to make sure you vet potential agents and ask plenty of questions, making sure that an agent’s expertise includes marketing.
Learn more about buying and selling multi-family in Cleveland! Contact us today! Call or text (440) 628-1321
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