Contract For Deed Homes

Multi-Family Homes

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Minnesota.

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Buying a multi-family property on a contract for deed

Whether you are looking to be an owner occupant or a landlord, looking for a multi-family property on a contract for deed can be a challenge unless it is located in a less desired neighborhood or has more work than you can handle. Very few home sellers offer contract for deed terms when they sell multi-family property because they are in higher demand, especially when rents are on the rise!

What is multi-family real estate?

Multi-family real estate is simply any property with more than one unit. Duplexes, triplexes, fourplexes as well as apartment buildings would all fall into this category.

Are multi-family properties for anyone?

No. Just because you have a friend that owns a duplex, heard a podcast about real estate investing, or visited a seminar – it doesn’t mean you should go out and buy a multi-family building.

Live for free.

Most multi-family properties are owned by real estate investors but some are owner occupied. If your goal is to owner occupy multi-family property, your goal should be to at least figure out a way to live for free if not cash flow from living there!

Cash flow analysis.

Number one rule of any business – you have to be profitable. If you are not making money – you are losing money! So before you buy a multi-family property on a contract for deed, make sure you do proper cash flow analysis so that your investment doesn’t become a burden to you.

Residential vs Commercial multi-family

2-4 unit multi-family properties (such as a duplex, triplex, or a four-plex) are considered to be residential when properties with 5+ unites are commercial. Before buying a multi-family property on a contract for deed, you should have a plan in place on how you are going to refinance out of it. The minute you switch from residential to commercial be prepared for the entire real estate world that you once knew to be completely different!

Passive income.

Owning a multi-family property is a perfect way to start building passive income and long-term wealth. Starting out small with acquiring 2-4 units properties can lead you to owning huge apartment complexes or might kill any desire to be a landlord. If you are after generating passive income, real estate is the way to do it!

One loan, multiple units.

We all know getting a home loan is a long and painful process. When you buy a multifamily property, you only have to get 1 loan which is a huge benefit of investing in multi-family real estate. If you are buying a duplex on contract for deed, you also get only 1 loan, not 2. If you were to buy a 20 unit apartment building, that’s 1 loan vs 20 single-family homes!

One insurance policy.

Same as getting a loan, having 1 insurance policy vs 20 is a big deal. We all hate insurance but should understand importance of it. If you ever decide to invest in real estate, a good insurance agent should become your best friend.

Less competition.

When buying multi-family properties, you have less competition to worry about because now you are competing primarily against real estate investors and very few home owners. On the other hand, when you invest in singe-family homes – you compete against everyone.

Less inventory.

A big downside is lack of inventory, especially multi-family property on contract for deed!

A Few Tips to Avoid Headaches
  • Do your research. Don’t buy multi-family property on contract for deed just because you have no other options. There is always a good reason why an owner is offering contract for deed terms.
  • Screen Your Tenants. Keep emotions out of it, treat it as a business. Don’t sympathize with everyone. Credit score and previous rental history is a good indicator of one’s character.
  • Structured Policy. Make sure that your have written policy that you can always refer to when dealing with difficult tenants. Most folks are fine, but it will be that one crazy tenant that will make you want quit landlording.
  • Family and Friends. You choose what you want to do with them but late and missed payments are guaranteed because you are “friends” or “family”. They will abuse the relationship.
  • Hire Others. If toilets and grass mowing is not your thing – hire it out. Don’t spend your day mowing grass or raking leaves. Focus on real estate investing and not maintenance if you are serious about it.
  • Treat it like a business. Make sure it is a profitable business. Set up systems and processes to help you find and screen tenants, deal with issues, repairs and maintenance.

Where to find multi-family properties?

Use the search tool above that allows you to look at all multi-family properties for sale in MN. However, very few of them are actually available on contract for deed and you will have to use a third-party investor to finance it for you. Also, you will find convenient short links below with more multi-family listings in MN!

Fill out your information below and let us know exactly what type of a home you are looking for and we will be in touch with you shortly

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