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Investing in multifamily real estate

Blog Investing In Chicago Real Estate

You may have had about investing in multifamily real estate when researching existing opportunities in real estate. This article explores the many aspects of multifamily real estate and why you should consider investing in this sector. We also highlight the standout elements that make Fortress Home your preferred general contractor.

Benefits of investing in multifamily property

One question that rings in investors' minds is, “are multifamily properties a good investment?” To answer that, we take a look at the various benefits of multifamily real estate.

1. Expensive but easier to finance

While single-family properties can cost as low as tens of thousands of dollars, the investment needed for multifamily homes can extend well into the millions. The initial assumption might be that the expensive investment option will prove a challenge when securing finance.

That is not the case. Banks will prioritize the multifamily property due to the consistent cash flow from rent. Multiple tenants mean that the property needs not be fully occupied to generate cash flow. With single-family units, if the home is not occupied, then there is no income.

2. Property Management makes financial sense
The preference for investors in real estate is to generate passive income. That requires not being actively involved in the construction or the day-to-day running of the property. Property managers exist to ease your burden of nurturing your investment while you focus on your primary activities. The general practice is to pay the property manager a fraction of the monthly income in return for handling activities such as rent collection, property maintenance, looking for tenants, and evicting uncooperative ones.


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Suppose you were to invest in a single-family home. In that case, you’d need to handle all that yourself since the income is not enough to share with a property manager. The economies of scale associated with multifamily real estate properties allow you to let a property manager handle the day-to-day without worrying about losing a significant amount of your margins.

3. You’ll take less time to grow your portfolio
Suppose your investment strategy is to build a relatively large real estate portfolio. In that case, multifamily investment is the way to go. For instance, building an apartment complex with 15 units will require much less time than building 15 separate single-family homes.
For real estate investment in apartment buildings, you will only need to deal with a single property owner to start the project. If your form of investment is land, you will only need that single piece to get started on your real estate portfolio

Stages of cooperation

1. Evaluation and Budgeting
When an investor approaches us and tasks us with building their apartment complex or any other form of a multifamily property, we start with evaluating the neighborhood. The evaluation will determine whether the area is suitable for real estate investment in multifamily housing. Based on our findings, we can then advise you on important choices such as zoning variance applications and other steps to ensure compliance with the building codes and value maximization for your property.

We will then prepare a detailed budget that lays out the construction costs for you and the critical project milestones. The budget will also include estimates for the feature options for design, finishes, and floorplans. Based on your project budget, you can decide on the suitable designs, finishes, and floorplans at this point of the process

2. Construction
Once you give the green light to proceed, formalize the partnership, and secure financing for the project, construction begins. Our team of experts will handle the fabrication and installation of steel structures. The steel structures are then matched with either full masonry or wood frame structures as per the architectural drawings. We will make sure that there are strong reinforcement systems to strengthen the structure. Our use of waterproof materials ensures your multifamily building is dry during every season.

The integrated advanced insulation technologies are meant to promote energy efficiency and offer you a selling point to renters conscious about energy costs and emissions. In the same spirit, we used LED lights due to their top ranking in their eco-friendliness and efficiency.

3. Finishes and Handover
We adhere to the building codes strictly to ensure no need for multiple safety checks from inspection authorities. Your selection of floor finishes will be applied whether it is bamboo, hardwood, or engineered flooring with different board sizes. Trust our team of experts to advise you on the ideal selections based on the property's dynamics and intended client base. The entire multifamily property will be developed with your vision in mind by selecting the preferred finishes in all areas.

On completion of construction and inspection, we will hand over the property to you, and you can start the process of either putting the units up for sale or renting them to suitable tenants. Your passive income stream is now ready to start bearing fruits


Fortress Home are your “New home builders near me”. We have been working in the Chicago IL area for over 20 years.

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Upgrades That Can Add Value to Your Multifamily Property

Investment in multifamily homes can come in the form of purchasing older units and making upgrades to compete at the same level with newly completed units. Here are some upgrades that will ensure your multifamily investment properties are appealing to potential tenants.

High-end amenities
Residents want convenience and will be willing to pay a premium for it. You can include amenities such as dry cleaning lockers for drop-off and pick up of laundry. Given that high-end properties have such amenities, it would be prudent to incorporate them in older buildings. Find out about the existing amenities in the apartment buildings in the area to ensure that you match them.

Interior improvements
Owning rental properties requires that you remain in touch with the latest technologies in residential units’ appliances and other options. You can upgrade the appliances such as dishwashers, washers, and dryers and update the internet access options to ensure high speeds. Consider updating the appliances that are not considered energy efficient by current standards. Go the extra mile and add app-enabled heating, air conditioning, and enhanced security features that turn the unit into a smart home.

Fortress Home is a permanent large independent team that will take care of every stage of construction.
We will do better than perfect!






Pet-friendly provisions
In a modern world where individuals are increasingly isolated, they seek comfort in their pets. Making provisions for allowing pets in your building offers unique value to potential renters.

You can mitigate the risk through provisions such as cleaning fees, pet rent, and pet deposits. Attract the growing number of pet owners with amenities such as grooming stations.

Improvements for the common areas
The ongoing COVID-19 global pandemic has dramatically increased the number of people working from home. Post-pandemic, a significant number of them will continue with the trend. Ensure that you optimize your ROI on your multifamily investment by adding flexible spaces that allow for collaborative work and study.

Improve curb appeal
When building an apartment complex or purchasing an older one, note that the curb appeal offers potential tenants a first impression. Focus on the green spaces and landscaping where there is sufficient space to do that. Your curb appeal depends on the lighting, fences, and furniture available on the curb in urban areas.



Ways to Raise Money for Multi-Family Investment Properties

As mentioned in an earlier section of this article, the construction costs for multifamily properties can rise as high as millions. Not many investors can raise such high amounts without seeking the help of a financial institution. Here are several ways you can raise money to start your passive income journey from building a multifamily property.

Mortgage
Banks are open to offering mortgages to investors seeking to build multifamily homes. Provided that your credit score is good, a mortgage is an ideal approach. From a bank’s perspective, the repayment burden is on multiple people, and therefore, the risk is distributed. However, please note that most banks' standard practice is that they require that you raise a minimum of 20% of the total construction cost.

Home equity loans
If you are already a homeowner, the property can be used to take out a loan to raise funds to construct a multifamily project. If you have a mortgage on the existing home, you already own part of it, and that part is your equity. You can then leverage that equity's value to apply for a loan that will be used to develop the multifamily property.

Hard money loans
When you have issues with your credit score levels, consider borrowing from individuals rather than institutions. These loans are short-term and have high-interest rates that can go as high as 10% more than the average lending rates for traditional financial institutions.

Crowdfunding
The concept of crowdfunding has taken off in recent years. You can utilize the internet and social media outlets to reach potential investors. These investors will own a share of the property, and if the messaging and strategy are convincing, you can manage to raise the amount required in a short time.

Friends and family
A word of caution: money ruins relationships. So tread carefully if you choose to explore this path when raising funds for your multifamily real estate property development. You can approach friends and family and share your vision of the project with them, then ask them to join you as investors in the project. Ensure that all your agreements are documented and legally valid regardless of your belief in your relationship's strength.

Recommended reading

Business in Construction - How to Invest in Real Estate
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Get started today on your real estate investment or development project. Looking for property development investment and funding opportunities?

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Strategies For Multifamily Resident Retention

Once you have successfully built an apartment complex and filled it with suitable tenants, it is important that you take proactive measures to retain them. Here are some strategies for resident retention for your multifamily investment.

  1. Choice of the property manager
    Passive investing in multifamily properties means that you will not be actively involved in the units' running. The property manager you contract and their agents will be the landlord's face that the renters will access. This means that you need to ensure that the manager and their employees are well-trained people who know all aspects of their job and how to behave professionally. Residents being comfortable with the managers will lead to them being inclined to remain to be your tenants.
  2. Understand your residents’ profile
    When you understand the profile of the property’s renters, you can figure what appeals to them. That way, you can ensure that their interests are well represented in your property’s features. Take the time to collect residents’ feedback and implement changes that make it clear to them that their voices are heard. If your residents are happy, then their desire to move is minimized.

About company

Fortress Home is a trustworthy general contractor that handles every step of the construction process. We have a highly capable team with decades of experience in their respective specialties. You will be the recipient of high standards of construction and consistency in every aspect of our work. Being experts in construction entails being overly familiar with the quality standards and regulations to ensure that your building is safe for occupancy and will pass every inspection.
You will get value for your money when partnering with Fortress Home. Our prices are affordable without compromising or the quality of the materials or the construction crew's efforts. If you are interested in partnering with us, enter your property details on our website, and you will get a free estimate of your project plus an offer for materials and installation costs within two days.

USP of the company

We are a family-owned business that espouses our family values in our approach to business relationships and performance. Fortress Home relies on a permanent large independent team to handle every step of the construction process. The common practice of using contractors in our industry does not apply since we believe one team ensures consistency.
The outstanding quality of the work we do is evident in our completed projects. At Fortress Home, we are committed to high standards of business ethics in everything that we do. Trust the exceptional caliber of our people to deliver beyond your expectations. /p>

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FORTRESS HOME

Fortress Home combines the roles of a general contractor, a construction partner, and a construction manager. Our talented workforce helps us professionally manage all aspects of on-site construction.

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