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Writer's pictureJarom A Pratt

What are the Four Different Types of Multifamily Housing Structures?


Four Different Types of Multifamily Housing Structures


Within the world of multifamily real estate construction there are three main types of buildings–plus a bonus fourth type that we will talk about at the end of this article. The four types of multifamily housing structures that we are going to explore are:



At EagleCap we focus especially on small apartments and large multifamily. The first three types of multifamily construction are traditionally the least risky for new and seasoned investors and firms. Breaking into the world of Luxury High-Rise Buildings typically involves partnerships between multiple large-scale real estate investing corporations. Let’s take a look at each of these types of multifamily, how many units they typically are, and how to invest in them.




The Four Types of Multifamily Housing Structures



Residential

2-4 units


residential multifamily building

Duplex, triplex, and fourplex buildings are all considered residential multifamily construction. They are smaller buildings that are often attractive to new real estate investors. Residential multifamily properties of two to four units are typically eligible for residential financing (similar to single-family homes) with lower interest rates and down payments.


Duplexes, triplexes, and fourplexes allow for owner-occupied financing benefits, where investors can live in one unit while renting out the others, covering mortgage costs and sometimes even generating cash flow profits. This makes residential multifamily a popular choice for new or hobby-investors. 




Small Apartments

5-70 units


small multifamily apartment building

Small apartment buildings, ranging from 5–70 units, are commonly financed through regional banks or credit unions, which may require recourse lending if the loan amount is less than $1 million. Recourse lending means the borrower is personally liable for the loan. These buildings usually don’t have on-site management unless they have at least 50 units, but are almost always managed by an off-site property manager.


Small apartment buildings offer more scalability and diversified risk than duplexes and fourplexes, allowing investors to grow their portfolios without managing a large multifamily complex. This makes them the most common investment option for EagleCap at the moment. To find some of the best places to invest in multifamily real estate, check out our other article.




Large Multifamily

70-300+ units


large multifamily property

Large multifamily complexes typically have more than 70 units and offer investors the benefit of professional property management on-site, as the scale can justify the cost. These properties attract institutional financing, giving owners a wider range of loan options, such as Fannie Mae or Freddie Mac multifamily loans.


The increased size of these complexes often allow investors to take advantage of higher economies of scale, less risk, and diversification. EagleCap will often invest in such properties as they can lead to better returns and more stable cash flow. 




Luxury High-Rise Buildings

100+ luxury units


luxury high-rise multifamily buildings

High-end multi-story properties are located in luxury high-rise buildings within high-demand urban areas. They typically offer premium amenities like gyms, pools, hot tubs, club houses, and additional services. 


These buildings are capital-intensive, requiring substantial upfront investment and long-term maintenance budgets. Investors in these properties may cater to affluent tenants willing to pay higher rents for premium services and central locations, often resulting in higher potential revenue streams but also increased management and maintenance costs. These buildings are often included in portfolios consisting of multiple properties.



Conclusion


Multifamily real estate has a lot more to it than most people think. The various property types each have their own unique financing, management, and tenant attraction factors, and the right choice depends on the individual investor’s goals, capital, timing, and desired level of involvement. To get started investing in multifamily yourself, or even just to learn more about multifamily, contact us to set up an appointment.

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