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4 Ways to Get Paid by Investing in Multifamily Real Estate

Updated: Jun 28, 2023

As the founder of Focused Capital, a growing real estate investment firm, I have seen firsthand the many benefits of investing in multifamily properties. One of the most attractive aspects of multifamily real estate investing is the ability to generate multiple streams of income. In this article, I will explain the four ways investors can get paid by investing in multifamily real estate and why this is an excellent investment strategy for both seasoned and new investors.


1. Rental Income: The Bread and Butter of Multifamily Real Estate

The primary way investors get paid in multifamily real estate investing is through rental income. Multifamily properties are residential buildings that have two or more rental units, such as apartments or condominiums. The property owner collects rent from tenants, which provides a steady and reliable source of income over the long-term.

Rental income is the bread and butter of multifamily real estate investing because it is a recurring source of cash flow. Rental income is typically paid monthly, and as long as the property is occupied, it provides a consistent stream of income. Additionally, rental income can increase over time as rent prices increase with inflation, leading to higher returns on investment.


2. Appreciation: The Long-Term Growth Driver

Multifamily properties can also appreciate in value over time, providing investors with the opportunity for capital gains when they sell the property. Appreciation refers to the increase in value of a property over time due to market demand, inflation, and other economic factors.

Multifamily properties in desirable locations can appreciate significantly over time. For example, if an investor purchases a multifamily property in an up-and-coming neighborhood, they may see significant appreciation in the property's value as the neighborhood becomes more desirable. The property's value can also appreciate as the investor makes improvements and renovations to the property. Forcing appreciation, as we at Focused Capital call it, is what we love. After we acquire a property, we target making improvements to the units and/or amenities to enable us to market the property for higher rents. Tenants are more likely to pay a higher rental price for a property that has more features and has interior contemporary updates.

Appreciation is a long-term growth driver and may not be realized until the property is sold. However, it can provide investors with a significant payout when the property is sold, in addition to any rental income earned during the ownership period.


3. Refinancing: Unlocking Equity for More Investment Opportunities

Another way investors can get paid in multifamily real estate investing is through refinancing. Refinancing involves taking out a new mortgage loan to replace an existing loan. The new loan can have more favorable terms, such as a lower interest rate, and can free up equity for other investments.

For example, let's say an investor purchased a multifamily property for $1 million and took out a $750,000 mortgage loan. Over time, the property appreciates in value, and the investor pays down the mortgage loan. The investor may decide to refinance the property and take out a new mortgage loan for $900,000. The investor can use the additional $150,000 in equity to purchase another property or invest in another opportunity.

Refinancing can provide a lump sum payout without selling the property. This can be an excellent strategy for investors who want to take advantage of lower interest rates or free up equity for other investments.


4. Sale: The Ultimate Payout

Finally, investors can get paid in multifamily real estate investing by selling the property. Selling a multifamily property can provide a lump sum payout, in addition to any rental income earned during the ownership period and any appreciation in the property's value.

Selling a property can be an excellent strategy for investors who want to realize their profits and move on to other investment opportunities. For example, an investor may sell a multifamily property to purchase a larger property or invest in a different asset class altogether.



Multifamily Real Estate Investing Offers Multiple Streams of Income

In conclusion, multifamily real estate investing offers multiple streams of income, making it an excellent investment strategy for both seasoned and new investors. The four ways investors

get paid in multifamily real estate investing are through rental income, appreciation, refinancing, and sale.


Rental income provides a steady and reliable source of income over the long term, while appreciation can provide investors with significant capital gains when they sell the property. Refinancing can unlock equity for other investments while selling a property can provide a lump sum payout.


Investors who are interested in multifamily real estate investing should work with experienced professionals to identify and evaluate investment opportunities. A real estate investment firm like Focused Capital can provide valuable guidance and support to investors looking to get started in multifamily real estate investing.


Additionally, investors should carefully evaluate each investment opportunity to ensure that it aligns with their financial goals and risk tolerance. Factors to consider when evaluating an investment opportunity include the property's location, condition, rental income potential, and appreciation potential.



There are many important considerations when evaluating a multifamily deal and we make it our mission to carefully vet each of these items. If you would like to learn more about passively investing in multifamily, please reach out to us at info@focusedcapital.com!


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