CalculateRealEstateROI

Multifamily · Guide

Small Multifamily (5–20 Units)

The sweet spot — too big for retail, too small for institutional. Best risk/reward for individuals.

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

Key takeaways

  • Less competition.
  • Commercial financing required.
  • Hands-on management possible.
  • Scales operationally.
  • Path to bigger multi.

Core concepts

Competition

Smaller buyer pool; better pricing.

Financing

Commercial loans, local banks.

Management

Third-party or owner-managed.

Step-by-step framework

  1. 1Target 5–20 unit listings.
  2. 2Local bank relationship.
  3. 3Third-party PM.
  4. 4Scale to bigger deals.

Common mistakes to avoid

  • Treating as SFR.
  • Self-managing past 10 units.

Frequently asked questions

Best market?

Secondary metros.

Capital?

$200–500k entry.

Best loan?

Local bank commercial.

Cap rate?

6–8%.

Action checklist

  • ☐Local bank.
  • ☐Third-party PM.
  • ☐Underwriting template.

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