Rental Property Types8 Ways to Find Profitable But Cheap Multi Family Homes for Sale by Charles Mburugu May 24, 2019May 24, 2019 by Charles Mburugu May 24, 2019May 24, 2019Learn how to find cheap multi family homes for sale that will make you money!Also referred to as a multi-dwelling unit (MDU), a multi family property is a residence that has two or more units within the same building. They come in different configurations, the most common being townhouses, duplexes, and some kinds of condos. Each unit comes with its own bathroom, kitchen, and living space.So, why should people consider investing in multi family real estate?High return on investment – Unlike a single family home that produces one monthly rental income, a multi family home generates multiple streams of income monthly.Less risk – Vacancy for a single family property means a total loss of income. However, since multi family investment properties have multiple units, there is less risk of loss when one tenant moves out.Scalability – Instead of buying one single unit at a time, real estate investors can grow their portfolio quickly by venturing into multi family properties.Time/cost saving – The budget for purchasing a 20 unit multi family property is much lower than that of 20 similar single family homes. Besides low property prices, investors spend less money since they need only one leasing agent, property manager, attorney and handyman. In addition, handling paperwork is less time-consuming.Dual usage – Investors can use multi family properties for both commercial and residential purposes. For instance, the ground floor could be rented out to businesses such as salons, barber shops, pharmacists, and even mini-markets, with the upper floors reserved for residential use.House hacking – If the real estate investor doesn’t own a home yet, they could live in one of the units and rent out the rest. This means living for free while earning passive income every month.However, though multi family properties come with a wide range of benefits, they can be very expensive. This is why investors need to learn how to find cheap multi family homes for sale. Here are a few ways:1. Use Mashvisor’s Property FinderInvestors can use Mashvisor’s property finder to look for multi family homes that match their criteria in terms of listing price, optimal rental strategy, market availability, and return on investment. This tool can also help identify the best investment properties based on their cap rate, cash on cash return, and occupancy. The ability to select up to 5 locations at the same time saves investors the trouble of searching for multi family homes in individual cities. This means that not only can an investor find a cheap investment property but also one that is profitable.Do you have a free Mashvisor account? Use our Property Finder to find lucrative investment properties that match your criteria in a matter of minutes! Sign Up for Free2. Consider a Fixer-UpperQuite often, cheap real estate is sold at a low price because it requires plenty of rehab work. Investors can buy such properties, fix them up and sell them at a much higher price. However, such fixers often come with complications and risks, thus making them difficult to finance. Investors should keep in mind these tips before purchasing these types of cheap multi family homes for sale:Get the fixer-upper checked by a professional home inspector.Get an estimate of repair and renovation costs from licensed contractors.Find cheap multi family homes for sale that only require ‘cosmetic fixes’ such as new paint or carpet.Consider getting a rehab loan that will incorporate the renovation costs.Related: Home Renovation: A Guide for Fixer-Upper Investments3. Look Beyond the CityOne of the most effective strategies for finding cheap multi family homes for sale is by focusing outside the busy suburbs and cities. Sometimes, low priced properties are found within just an hour or two’s drive from any major city. In the same way, investors should look outside the West and East Coast for cheaper and more profitable investments. The South and Midwest are more likely to have affordable real estate investments.4. Look Around for ‘For Sale By Owner’ SignsIn an effort to avoid listing and advertising costs, some homeowners simply place a ‘For Sale By Owner’ (FSBO) sign in their front yard to attract buyers. Quite often, such property owners are not aware of the real value of their home. As a result, they are likely to sell them at a much lower price compared to other similar properties in the neighborhood. 5. Check Dozens of Properties Finding cheap multi family homes for sale will require looking at numerous properties in order to find the best deal. Investors should attend numerous open houses to get a good understanding of the local real estate market. In addition, arrangements should be made with a local realtor to tour dozens of multi family properties. Any free time could be spent driving up and down the neighborhood looking for FSBO signs. This will increase the chances of finding a great deal.Related: What Are the Pros and Cons of a Real Estate Open House?6. Set Up Automatic AlertsThis is a great strategy for anyone that doesn’t know how to find multi family homes for sale. Setting up automatic alerts allows a real estate investor to be the first to make an offer on cheap multi family homes for sale. Such alerts can be set up on real estate websites such as Mashvisor, or through a real estate agent. To avoid confusion, the alert should be set up specifically for multi family homes.7. Look for Real Estate Owned (REO) PropertiesA real estate owned (REO) property is one that was foreclosed by a financial institution and is now being resold. Quite often, REOs are properties that have been neglected for many years, thus requiring some fixing. Since banks are not emotionally involved like homeowners, it is much easier to negotiate a lower price and get a great deal on multi family foreclosures.You can find bank-owned foreclosed real estate at Mashvisor. Click here to start your search.8. Work with a WholesalerBuying through a wholesaler is a great strategy for finding cheap multi family homes for sale. A wholesaler is basically an individual that looks for great deals and then transfers the right to buy the property to another real estate investor with a small markup. Since wholesalers have excellent negotiation skills, buyers can enjoy great savings on investment properties. However, it should be noted that most wholesalers only do business with cash buyers. Besides online forums, wholesalers can be found through the ‘I’ll buy your house for cash!’ signs around the neighborhood.Related: Real Estate Wholesaling in 7 Simple StepsConclusionBefore buying cheap multi family homes for sale, investors need to research potential neighborhoods thoroughly. Factors to be considered include amenities/attractions, school ratings, walk score, nearby businesses, public parking, the condition of other properties, and public transportation. This research can be done by searching online, driving through the neighborhood personally or working with a local agent. Start Your Investment Property Search! START FREE TRIAL Affordable MarketsFSBOLocationMulti FamilyProperty FinderWholesaling 0FacebookTwitterGoogle +PinterestLinkedin Charles MburuguCharles Mburugu is a HubSpot-certified content writer/marketer for B2B, B2C and SaaS companies. He loves writing on topics that help real estate investors and agents make better choices. Previous Post How to Make Money in Real Estate: Invest in Corporate Rentals Next Post What Is a Short Sale in Real Estate Investing? Related Posts The Impact of COVID-19 on Multi Family Real Estate Investing in Residential Real Estate Is the Ultimate Way to Go for Beginner Investors Should you be investing in studio apartments for rent? The Ins and Outs of a Multi-Family Investment Property The Pros and Cons of Buying a Condo Investment Are Townhomes a Good Investment Choice in 2018? 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