When people picture a successful multifamily investor, they usually imagine someone standing in front of a massive apartment complex with hundreds of units. The real estate industry has trained us to celebrate door count. Investors introduce themselves by saying how many units they own, how many properties they have purchased, or how large their latest deal was.
But doors do not create wealth.
Profitable properties do.
I learned this lesson because my first multifamily investment was not large, impressive, or the kind of property that would make someone stop scrolling on social media. It was a 16 unit apartment property built in 1975. The buildings were painted pink, green, yellow, and blue. It was not glamorous, but it changed the direction of my life.
At the time, I was struggling to find a multifamily property. I had been taught to look for 100 units or more, so that was what I searched for. I analyzed large deals, talked to brokers, and spent hours looking at properties that never worked.
I had already left my job. I needed income, and I needed a deal.
Then I found a 16 unit property.
My coach thought I was wasting my time. I was told the property was too small, there would not be enough money in it, and no one would want to partner with me.
I analyzed it anyway.
I made an offer anyway.
Someone partnered with me anyway.
We closed the deal, and that little property became one of the strongest cash producing assets in our portfolio.
That experience now shapes my multifamily investing coaching and mentorship. The goal is not to own the biggest property. The goal is to own a property that performs.
From the Mother of Triplets to the Mother of Multifamily
I did not grow up in a real estate family. I did not have a business degree, and I did not begin my career with a background in finance, investing, or property operations.
I spent 20 years in church ministry and was in the midst of raising my triplet boys as a single mother. I was earning about $50,000 a year and working seven days a week. I loved the work I was doing, but I was tired of living paycheck to paycheck.
My boys were my reason for wanting something more.
There were times when they felt like the church came before them because my job required so much of my time. I did not want to continue living in a way where my children received whatever energy I had left after everyone else had been taken care of.
I wanted choices. I wanted to be available for them, volunteer, attend their activities, and create a future where my income was not completely tied to the number of hours I could work. I wanted to be a mother that my boys could look up to. I wanted to be a mother my boys knew.
My first step into real estate was purchasing a commercial strip center for approximately $650,000. That property later grew in value to more than $1.3 million.
Once I experienced what ownership could do, I was bitten by the real estate bug.
I began investing in my education, building relationships, finding mentors, and learning how commercial real estate worked. Some of my best mentors were not even in real estate. They taught me how to lead, how to make decisions, and how to continue moving when I did not have every answer.
Today, I have found, funded, closed, and managed a real estate portfolio valued at more than $32 million, with a focus on small multifamily properties.
I have coached investors through a national real estate education company, spoken for real estate investor associations across the country, and taught investors how to find, analyze, purchase, and operate apartment properties.
None of that happened because I started with all the answers.
It happened because I was willing to begin and willing to learn.
And most importantly, I got to be the mother who always showed up for her kids.
The Size Trap in Multifamily Real Estate
Many investors become stuck because they believe buying a larger property is the only way to build real wealth.
They may spend years searching for a 100 unit apartment complex while ignoring a profitable 12 unit, 20 unit, or 40 unit property sitting in their own market.
The belief is that a small property will require too much work and produce too little income. At the same time, investors assume a larger deal will automatically provide more cash flow, attract more capital, and make them look more successful.
That is not always true.
Larger properties can be excellent investments, and syndications can be a successful way to purchase apartment communities. However, bigger properties usually require more money, more investors, more complicated financing, more decision makers, and a larger operating structure.
You may have less control over the property and a much smaller percentage of ownership.
An investor may say they own 1,000 units, but ownership is not determined by the number printed on a marketing page. If the general partner group owns only 20 percent of the property, that investor may effectively own a much smaller share.
A limited partner who contributes $50,000 to an $8 million capital raise owns only a tiny percentage of the asset.
There is nothing wrong with that structure, but investors should understand the difference between being associated with a large property and owning a meaningful percentage of a profitable one.
What Matters More Than Door Count?
Instead of looking only at the number of units, consider:
- Ownership: How much of the property do you actually own?
- Control: How much influence do you have over the property and its operations?
- Cash flow: How much income does the property actually generate?
- Risk: What financial exposure comes with the investment?
- Returns: What is the investment producing for you?
I often ask students this question.
Would you rather own 10 percent of 100 units or 50 percent of 20 profitable units?
There is no single answer that applies to every investor, but the question forces you to think about ownership, control, cash flow, risk, and actual returns rather than simply counting doors.
My First 16 Unit Property
The 16 unit property that others believed was too small was purchased for $560,000.
The 16 Unit Deal by the Numbers
- Purchase price: $560,000
- Capital raised: Approximately $250,000
- Capital improvements: Approximately $120,000
- Average rent at acquisition: Approximately $497 per unit
- Average rent after improvements: Approximately $980 per unit
- Apartments renovated: Approximately 70 percent
- Cash pulled out after refinancing: Approximately $170,000
- Average yearly cash return: Between 15 and 18 percent
- Average monthly distributable income: Approximately $6,700
- Estimated value at a 7 percent cap rate: Approximately $1.31 million
I did not contribute any of my own money to the down payment.
We refinanced the property after 20 months.
That property was not too small to make money.
It was small enough for us to understand, control, improve, and operate successfully.
How Did a Small Multifamily Property Create Value?
The value did not come from the number of units. It came from:
- Increasing rental income
- Controlling operating expenses
- Renovating units wisely
- Improving net operating income
- Following the business plan
Income went up. Expenses were managed. Net operating income improved. The value increased.
That is how multifamily real estate works.
Why Small Multifamily Can Help Investors Start Faster
Small multifamily properties can provide a more realistic entry point for investors who are ready to move from real estate education into ownership.
What Are the Advantages of Small Multifamily Investing?
Depending on the property and market, smaller multifamily deals may offer:
- More attainable purchase prices and equity requirements
- Financing opportunities through local banks and credit unions
- Less competition from large investment companies and institutional buyers
- Opportunities in secondary and smaller markets
- Greater control over property-level decisions
- Smaller partnerships that can make decisions more quickly
- A practical environment for learning multifamily operations
Large investment companies and institutional buyers often overlook smaller properties because the transaction is not large enough for their model. This creates opportunities for local investors who are willing to search secondary markets, build broker relationships, and speak directly with owners.
Smaller properties can also provide greater control. Many of my properties are owned through partnerships with only two people. We can make decisions quickly, work directly with the property manager, and respond to problems without waiting for a large group to agree.
Is Small Multifamily Investing Easier?
That does not mean small multifamily is simple or passive.
Once a property has more than four units, it is commercial real estate. The value is based largely on the income the property produces, not only on nearby sales.
Owners must understand:
- Underwriting
- Property management
- Capital improvements
- Financing
- Tenant retention
- The property’s business plan
Small multifamily investing gives you a practical environment in which to learn those skills without beginning with hundreds of units.
It is not thinking small.
It is choosing a deal you can realistically acquire, control, and improve.
Small Deals Can Create Real Financial Freedom
When I began purchasing properties, I did not have money to contribute to the deals. I earned a smaller share because I brought time, knowledge, relationships, underwriting, and operations instead of capital.
Even that smaller share was enough to replace my salary.
Once the income from my properties replaced what I had earned at the church, I had choices.
I could stay home with my boys. I could volunteer. I could be available when they needed me instead of constantly working around someone else’s schedule.
That time was priceless.
My children could see that they were my priority. They also watched me build something from the ground up. I showed them that with faith, work, education, and the willingness to act, a person can change the direction of their life.
What Does Financial Freedom Through Multifamily Investing Look Like?
Financial freedom is not only about having more money.
It is about having options.
It is the ability to choose:
- How you spend your time
- Where you work
- How dependent you are on employment income
- What role you want to play in the lives of the people you love
One property may produce $5,000 per month. Another may produce $7,000, and another may produce $12,000. When those properties are acquired and operated wisely, the income begins to stack.
That is how a small multifamily portfolio can replace a salary and create lasting wealth. For me, that is what financial freedom through multifamily investing looks like: profitable properties creating income, equity, and greater control over my time.
A Small Deal Can Become the Next Deal
Another one of our properties was also 16 units, but in a new community in Oklahoma.
We found it through a property manager we had met while touring another deal. That relationship led us to an opportunity that was not publicly marketed.
Another 16 Unit Deal by the Numbers
- Purchase price: $980,000
- Capital raised: Approximately $270,000
- Occupancy at acquisition: 100 percent
- Average rent at acquisition: Approximately $585
- Average rent after increases: Approximately $676
- Sale price after 27 months: $1,425,000
- Total return: Approximately 136 percent
Again, I had not contributed my own money to the purchase. When the property was sold, I used a 1031 exchange to move my portion into another property. That gave me a larger ownership percentage in the next deal.
The first property created the opportunity for the second.
How Can One Multifamily Deal Lead to Another?
This is the repeatable nature of small multifamily investing:
- Buy.
- Improve.
- Refinance or sell.
- Reinvest.
You do not need to purchase an enormous property to begin building momentum. You need a property with good numbers, a strong market, a workable business plan, and enough potential to move you toward the next opportunity.
How to Find Small Multifamily Properties
Investors often ask me how to find apartment properties with fewer than 50 units.
Where Should You Look for Small Multifamily Deals?
Begin by looking beyond the primary markets where every institutional buyer is competing.
Study secondary and smaller markets where population, employment, and rental demand are strong. Look for landlord friendly states and cities where you have family, relationships, or local knowledge.
Then begin building relationships.
Potential sources of small multifamily opportunities include:
- Local commercial brokers
- Real estate agents
- Property managers
- Apartment owners
- Commercial real estate listing platforms
- Tax assessor records
- Direct outreach to property owners
- Driving through neighborhoods and identifying apartment clusters
Small multifamily brokers may not be the same brokers handling 200 unit apartment complexes.
Research local property management companies because some also have brokerage licenses and may know owners who are preparing to sell.
My best opportunities have often come through relationships rather than a public listing.
A broker or property manager is more likely to bring you a deal when they know your market, property size, price range, and ability to close.
That is why a clear investment criteria matters.
Underwrite Quickly Before Going Deep
Once you find a property, you need a quick way to decide whether it deserves more time.
How Do You Quickly Analyze a Multifamily Property?
For an initial review:
- Calculate potential monthly rental income. Multiply the number of units by the average monthly rent.
- Account for vacancy and collections. I often begin with 93 percent for a quick review.
- Calculate estimated annual income. Multiply the adjusted monthly income by 12.
- Estimate operating expenses. For a first review of a small multifamily property, you may estimate expenses between 45 and 50 percent of income.
- Estimate net operating income. Subtract the estimated operating expenses from income.
- Estimate the property value. Divide the net operating income by the market cap rate.
This is not complete multifamily underwriting. It is a filter.
A complete real estate deal analysis goes deeper by examining actual income, operating expenses, financing, capital needs, debt coverage, cash flow, and the assumptions behind the business plan.
A Quick Multifamily Underwriting Example
Consider a 30 unit property with average rents of $700.
- Potential monthly rent: $21,000
- Monthly income at 93 percent collections: $19,530
- Estimated annual income: $234,360
- Estimated NOI using a 45 percent expense ratio: $128,898
- Estimated value at a 6 percent cap rate: Approximately $2.15 million
This quick process helps investors decide whether to continue or walk away without spending days on every deal.
The goal is not to make the property work.
The goal is to let the numbers tell you whether it works.
Analyze the Real Cash Flow
A consultant once told me that numbers do not lie.
Investors do not usually lie intentionally, but we can become very creative when we want a property badly enough.
We tell ourselves we can raise rents faster than the seller. We assume we will reduce expenses immediately. We believe the property manager will solve every problem, and we use the future projections instead of the current performance.
That is how investors talk themselves into bad deals.
What Should Multifamily Underwriting Be Based On?
Strong multifamily underwriting uses:
- Actual income
- Actual operating expenses
- Realistic rent assumptions
- Realistic renovation costs
- Financing and debt payments
- Current property performance
- Realistic assumptions about future improvements
A broker projection may show what the property could become, but you must know what it is today and how much money it will take to close the gap.
That discipline protects the investor by separating what the property is producing today from what you hope it may produce after renovations and operational improvements.
What Is Cash Flow in Multifamily Real Estate?
Cash flow is not a feeling.
It is the money remaining after operating expenses and the mortgage have been paid.
One of our 16 unit properties produced approximately $143,974 in annual income.
- Annual income: Approximately $143,974
- Net operating income: Approximately $90,554
- Yearly mortgage payments: Approximately $34,229
- Remaining cash: More than $56,000
That is the type of cash flow that can replace income and create options.
The math is not complicated, but the assumptions must be honest.
Leverage Knowledge, Relationships, and Other People’s Money
Many new investors believe they cannot purchase multifamily real estate because they do not have the down payment.
I did not begin by bringing money to the deals.
I brought value.
What Can You Bring to a Multifamily Deal Besides Money?
Leverage can include:
- Local bank financing
- Seller financing
- Partnerships
- Experience
- Relationships
- Underwriting skills
- Property operations
- Sweat equity
One partner may bring capital while another finds the property, analyzes the deal, works with the lender, and oversees the business plan.
Local banks and credit unions often like small multifamily properties because they understand the market and can evaluate the relationship as well as the real estate.
What Should You Ask a Multifamily Lender?
Ask lenders about:
- Their minimum loan size
- Whether they keep loans in their own portfolio
- Their equity or down payment requirements
- Available terms for properties with 5 to 50 units
- How they evaluate the property and borrower
Creative financing does not mean careless financing.
The goal is to build a structure where every partner understands their role, the risks are properly funded, and the property can support the debt.
Real Estate Education Must Lead to Action
Information alone does not make someone an investor.
I have worked with people who have spent thousands of dollars on real estate education but still feel lost when a broker sends them a property.
They know the vocabulary, but they do not know what to do next.
That is why I created Ignite RE Wealth and built my small multifamily coaching and mentorship programs.
I saw too many investors being taught only how to find a deal and submit an offer. They were not being prepared for everything that happens after the contract.
What Do Multifamily Investors Need to Learn Beyond Acquisition?
Owning multifamily real estate requires an understanding of:
- Financing
- Due diligence
- Property management
- Renovations
- Investor communication
- Operations
- Exit strategies
My coaching is designed to help investors see the entire business.
The purpose is not to create permanent students. It is to create capable owners.
Stop Counting Doors and Start Measuring Results
The real estate industry may continue celebrating the number of doors, but your returns are what change your life.
A large portfolio can look impressive while producing very little personal income. A smaller property with strong cash flow and meaningful ownership can create options, freedom, and the foundation for the next deal.
My 16 unit property was called too small.
It produced income, created equity, supported my family, and helped me build a portfolio valued at more than $32 million.
That does not sound small to me.
So, Does Size Really Matter in Multifamily Investing?
Yes, but not in the way most investors think.
The question is not whether a property has enough units to impress someone else.
The questions that matter are:
- Can the property produce sustainable income?
- Can it comfortably support its debt?
- Can it fund the improvements required by the business plan?
- Does the investment provide an appropriate level of ownership and control?
- Does it fit your resources and experience?
- Can you realistically operate it well?
- Can it move you toward your next investment and financial goals?
Whether you are learning how to buy your first multifamily property or deciding how to grow an existing portfolio, the best opportunity is the one that fits your resources, your experience, and your ability to execute.
The best size is the one you can buy wisely, operate well, and use to build the next chapter of your future.
