Multifamily Properties Basics and Types

two or more units (resendential)

Individuals or families

general short term leases 6 - 18 month

Diversity of tenants = stable cash flow

high sensitivity to increase or decrease in market rents

full operating expense burden on owner

management intensive

• day to day opertions / construction worker on property

made up of units & common area

2 - 4 Story wood frame

50 - 500 Units

suburban communities

Lifestyle amenities

calm peaceful environment

5 - 9 stories

steel frame

urban infill

50 - 200 units

wrap construction

• above ground concrete parking structure sorrounded by units

Podium construction

• units set atop concrete parking strucutre, common areas, and or commercial suits

10 + stories

steel frame construction

Urban infill

150 - 550+ units

A +/-

• new construction, first class amenities, top of market rents

B +/-

• silghtly dated and or recently renovated property with standard amenity package and mid tier rents

C +/-

• Affordable housing with older interiors, limited or no common area, bottom of market rents

properties used for housing of university students

often rented by the bed or room

high turnover and make ready cost

short term leases ( 9 - 10 month)

parent guarantor are common

short term leases

independent living to full time care

• independent living

  • depends on the needs of the tenant / services / programms / little or noassistnece needed

• assisted Living

  • 24 hour care

  • health related care

• Nursing homes

  • 24 hours & rehabilitation

  • Assistance needed for all or most of daily living

rentals rates and annual allowable increases set by HUD (Housing and Urban development)

Eligibility based on area median income (AMI)

• 80% AMI - low

• 50% AMI - very low

• 30% AMI - extremly low

Section 8

• Government funds rental payments directly

• renters must make less than 50% of AMI

Section 42

• Low income housing tax credits

• Developers receive tax credits in exchange for creating affordable housing

market rate and affordable units often both exist at a property