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Types of Multifamily Properties: Which One Is Right for You?

The other day, an investor asked me, “What’s the best type of multifamily property to invest in?”

My answer? It depends on how involved you want to be.

If you’re looking for hands-free, passive income without dealing with tenants, repairs, or property management headaches, then multifamily syndications might be your best option. Instead of owning and managing a property yourself, you can invest alongside experienced sponsors who handle everything while you enjoy the benefits.

But before diving in, it’s important to understand the different types of multifamily properties available—and which ones work best for passive investors in syndications.

What Are the Main Types of Multifamily Properties?

Multifamily properties come in various sizes and structures, but they all have one thing in common: they generate income from multiple rental units. Whether you’re an active investor looking to manage a property yourself or a passive investor considering syndications, knowing your options is key.

Here are the four primary types of multifamily properties and why syndications can be the most efficient way to invest in them.

In simple terms, the cap rate tells you how much income a property generates relative to its cost.

1. Apartment Buildings: The Most Scalable Investment

Best for: Passive investors looking for steady cash flow, long-term appreciation, and professional management.

Apartment buildings are the foundation of multifamily investing and offer some of the best opportunities for passive investors in syndications. These properties range from small (5–50 units) to large complexes (100+ units) and are typically managed by a professional team.

Why Apartment Buildings Are Great for Syndications:

Consistent Cash Flow – Multiple tenants ensure a steady stream of income.
Professional Management – No need for hands-on involvement; syndicators handle everything.
Economies of Scale – Expenses (maintenance, property management) are spread across multiple units, ineasing efficiency.
Value-Add Opportunities – Can be renovated and repositioned to increase rents and property value.

Syndication Advantage: Investing in an apartment syndication allows you to own a share of a large, cash-flowing asset without the need for direct management.

Best for: Individual investors who want direct ownership but are willing to manage tenants and maintenance.
A duplex (2 units), triplex (3 units), or fourplex (4 units) is a common starting point for small-scale investors. These properties allow an investor to house hack (live in one unit while renting out the others) or generate rental income from multiple tenants.

✔ Pros of Small Multifamily:

Lower cost of entry compared to large apartment buildings.
Easier to finance with residential loans (FHA, VA, conventional).
Offers some diversification with multiple rental units.

❌ Cons for Passive Investors:

Requires active property management.
No economies of scale—if one unit is vacant, cash flow suffers.
Harder to generate high returns compared to apartment syndications.

Syndication Advantage: Instead of dealing with the headaches of small-scale rentals, investing in a larger multifamily syndication allows you to benefit from true passive income and professional management.

3. Townhouses: Multifamily with a Single-Family Feel

Best for: Investors who prefer long-term tenants and properties that feel like single-family homes.

Townhouses are multi-floor units that share walls with other units but often have individual entrances and private yards. These properties are popular with families and can generate stable rental income.

✔ Pros of Small Multifamily:

Attract long-term renters looking for a single-family home feel.
Lower maintenance costs compared to apartment complexes.
Can be easier to finance than larger multifamily buildings.

❌ Cons for Passive Investors:

Less scalable than apartments.
Often part of HOA communities, which come with rules and fees.
Harder to increase value compared to apartment syndications.

Syndication Advantage: Investing in a multifamily syndication gives you access to larger, professionally managed properties—without the complexities of HOA restrictions and scattered townhome portfolios.

4. Mixed-Use Buildings: A Blend of Residential & Commercial Spaces

✔ Pros of Small Multifamily:

Multiple income sources—residential + commercial tenants.
Typically located in high-demand urban areas.
Strong appreciation potential in growing markets.

❌ Cons for Passive Investors:

Financing can be more complex than traditional residential properties.
Requires different leasing strategies for commercial and residential tenants.
Higher market volatility—commercial spaces can remain vacant longer than apartments.

Syndication Advantage: With experienced sponsors managing the property, mixed-use syndications offer the potential for higher returns without the management challenges of handling both residential and commercial tenants.

Why Multifamily Syndications Offer the Best Passive Investment Opportunity

If your goal is to build wealth through real estate while keeping your time free, multifamily syndications offer significant advantages over owning and managing properties yourself.

Truly Passive Income – No tenants, maintenance, or property management responsibilities.
Professional Management – Experienced sponsors handle the entire investment process.
Diversification – Syndications allow investors to spread their capital across multiple properties and markets.
Tax Benefits – Depreciation, cost segregation, and 1031 exchanges can enhance returns.
Lower Capital Requirement – Invest in multimillion-dollar properties with $50K–$100K minimum investments, rather than millions of dollars on your own.

The Bottom Line: Multifamily syndications provide access to high-quality, cash-flowing properties without the responsibilities of direct ownership.

Ready to Invest in Multifamily Syndications?

Join Our Investor Club to gain priority access to exclusive multifamily syndications and passive investment opportunities!

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Why Join Our Investor Club?

✔ Early access to institutional-grade real estate deals
✔ 100% passive income—let professionals manage the investment
✔ Proven investment strategies to build long-term wealth

Don’t miss your chance to start earning passive income through multifamily syndications!

Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or tax advice. All investments carry risk, and past performance does not guarantee future results. Investors should conduct their own due diligence and consult with a qualified financial or legal professional before making any investment decisions.