Buying a 4-unit apartment building (often called a or fourplex ) is widely considered one of the best ways to enter real estate because buildings with 1–4 units are classified as residential , allowing you to use more favorable financing than larger commercial complexes.
Because a 4-unit building is residential, you have several flexible loan options: Buying Your First Apartment Complex: An Investor Guide buy 4 unit apartment building
: Ensure the total monthly rent is at least 1% of the total purchase price for strong cash flow. 2. Financing Options Buying a 4-unit apartment building (often called a
: Use the Cap Rate (NOI divided by purchase price) to compare the deal against others in the same market. Financing Options : Use the Cap Rate (NOI
: Start with the rent roll to determine Gross Potential Rent (what you’d collect if 100% occupied at market rates).
: Subtract all operating expenses (taxes, insurance, maintenance, management) from the EGI. Do not include your mortgage payment (debt service) in this calculation.