CalculateRealEstateROI

Multifamily

Should I buy Class B or Class C multifamily?

Class B for risk-adjusted return; Class C for absolute yield, with higher operational risk.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Direct answer

Class B for risk-adjusted return; Class C for absolute yield, with higher operational risk.

Expanded explanation

Class B (workforce, 1980s–2000s) has lower turnover, easier financing, lower capex surprise. Class C (1960s–80s, harder neighborhoods) cap rates are higher but capex and bad debt eat into them.

Examples

  • Class B 5.5% cap stabilizing at 6% net vs Class C 8% cap netting 5%.

More Multifamily questions