Real Estate Investors Focus on Multifamily Properties
An apartment complex typically consists of a single building divided into multiple units for families to live independently. This includes structures like duplexes, triplexes, and fourplexes.
Real estate investors are increasingly interested in multifamily properties, particularly looking ahead to 2025. As Josh Lupo, who invests in upstate New York with his wife Ali, points out, “Prices and interest rates have basically doubled in many markets over the last four or five years.” Lupo also mentions that after tackling considerable student loans, their real estate efforts helped them reach financial independence. He explains, “What once made sense for long-term rentals—especially single-family homes—just doesn’t add up anymore.”
Childhood friends Connor Swofford and Peter Lu began investing in real estate in 2024 and have since amassed more than 20 apartments in Buffalo through buying, renovating, and renting multifamily properties. Initially, they focused on duplexes but are now shifting their attention to larger complexes with three units or more. “In our market, cash flow and cap rates look much better,” Lowe notes. “Just by looking at last year’s results, it’s clearer that this approach is more profitable and safer.”
Dana Bull, a Massachusetts-based agent and coach, refers to multifamily housing as a “three-headed monster,” highlighting its significant economic advantages, such as discounted acquisitions and economies of scale. She emphasizes the maintenance aspect: “If you have a three-family home, and the roof needs replacing, you only have to deal with one roof rather than multiple.”
Starting Your Journey with Multifamily Homes
Investing in multifamily real estate isn’t just reserved for veterans. Bull feels it serves as a solid entry point for beginners. Properties like duplexes and small multi-unit homes are classified as residential real estate, allowing you to qualify for mortgages that require low down payments if you plan to live there. For instance, Mike Newton managed to buy a duplex near Seattle for $450,000 without significant savings. Since he intended to occupy one unit, he only needed a 5% down payment instead of a more substantial 20% typically required for investment properties.
After he closed the deal, he moved into one unit and benefited from immediate cash flow, as the other unit was already rented out. Moreover, he found a roommate for his part, bringing in enough rent to cover most of his mortgage. Newton, who now owns over ten units, calls this strategy “house hacking,” which he considers a safe entry into real estate investing.
This method allows you to offset—or even fully eliminate—your mortgage by renting out part of your home. It’s a lower-risk way to test your readiness for the responsibilities of being a landlord. However, not all areas are rich in multifamily properties. Bull explains that many of these buildings date back to the late 19th and early 20th centuries, particularly around cities like Boston, where there is a larger inventory of such units.
If multifamily options aren’t available where you live, consider house hacking a single-family home. You might add an accessory dwelling unit (ADU) or convert your basement for rental use. Alternatively, like Newton, you could look for a roommate. Ultimately, it’s about creatively utilizing your space to help ease your mortgage costs.
