The Multifamily Investment Process: From Hunt to Exit

The Multifamily Investment Process: From Hunt to Exit

From the Legacy Investment Team Podcast, Episode 6

When you invest in multifamily real estate, you’re not just buying a property—you’re stepping into a process that begins long before closing day and continues well after you take ownership.

In this episode of the Legacy Investment Team Podcast, partners Josh Little, James Little, and Joshua Little walk through the entire multifamily acquisition process, from sourcing a deal to exiting for a profit. Whether you’re a first-time investor or simply curious how it works, here’s the breakdown.

Step 1: The Hunt

Finding the right property is the first challenge.

• Relationships with Brokers – Deals often come through brokers who send opportunities via email or phone. Building trust with brokers puts you on their short list.

• Market Cycles Matter – Six months ago, Legacy Investment Team was calling brokers to find deals. Now, brokers are calling them.

• Persistence Pays Off – Like hunting, most days you see nothing. But when the right property appears, you act quickly.

Step 2: Analysis

Once a property is identified, the team evaluates three key areas:

1. Location – Is the surrounding neighborhood improving? What’s planned nearby?

2. Property Potential – Can amenities be added? Could branding improve market appeal?

3. Operations – Are expenses too high? Are rents below market?

Value-add opportunities—such as adding a laundry facility, dog park, or storage units—can turn an average deal into a great one.

Step 3: Negotiation

Negotiations go beyond price. Terms can make or break a deal.

• Win-Win Mindset – The seller needs to walk away happy, but the deal must work for investors.

• Terms to Consider – Closing timeline, due diligence access, and creative structures like seller financing.

• Hands-On Approach – Legacy represents itself, negotiating directly with the seller’s broker.

Step 4: Underwriting & Funding

This phase involves securing both debt and equity:

• Lenders – Banks or credit unions provide the bulk of the financing.

• Investors – Two main structures:

  
  

  • Joint Venture (JV) – Smaller properties under $1M, with all partners actively involved.

  • Syndication – Larger properties where limited partners invest passively, and general partners handle operations.

  
  

Investors receive detailed projections from earlier phases to decide if the opportunity fits their goals.

Step 5: Improvements & Management

Once closed, the real work begins.

• Execution of the Vision – Partnering with property managers to implement planned upgrades.

• KPIs (Key Performance Indicators) – Metrics like occupancy, turnover, and marketing effectiveness are tracked to ensure performance.

• Value-Add Projects – Interior renovations (new flooring, paint, appliances) and exterior upgrades (roofing, landscaping, amenities).

• Rebranding – A fresh name, updated signage, and new online presence can reset a property’s reputation.

• Community Impact – Legacy partners with churches for on-site Bible studies, offers community spaces for outreach, and works to improve the surrounding neighborhood.

Step 6: Exit Strategy

Multifamily investments aren’t forever.

• Timeline – Hold periods often range from 3–7 years, though market conditions can shorten that.

• Profit at Sale – Investors earn ongoing “cash-on-cash” returns during ownership and receive their initial capital plus profits when the property sells.

• Future Planning – Selling a 50-unit property can open the door to acquiring a 150-unit asset, scaling impact and returns.

The Big Picture

The multifamily process is a cycle of:

Hunt → Analyze → Negotiate → Fund → Improve → Exit.

Done right, it produces strong returns, improves communities, and creates housing people are proud to call home.

And for investors, the barrier to entry is often much lower than expected—minimum investments can start in the $25K–$50K range, with opportunities to participate in larger, more stable assets without managing them directly.

Interested in learning more?

Legacy Investment Team is always looking for properties and partners. Whether you’ve spotted a potential acquisition or want to explore investing, visit legacyinvestmentteam.com to connect.