xhv8mzw7ge79waga35o97s2wbzpfr6 What Returns Come From a Fourplex Investment?

What Returns Come From a Fourplex Investment?



Of course the ocean is full of fish. Yet many who have been involved with Investing have learned the hard way that you can spend years casting your line only to return home again with very little…or dare I say nothing at all. So we hear that there are always fish in the sea—but how do we make sure that the shore we are standing on will fill our nets? And how do we know if the rod and lure we are using to catch ROI were even designed to bring the amount of return we need?

When investing, we each have to come into the game knowing the bottom line on return we need in order to fill our buckets sufficiently. Then we make sure that we hop on the right investment vehicle that is going to take us there.

We can spend years or decades casting your rod, hoping and crossing your fingers that we don't come up empty handed—or we can take a five minute break from social media today and learn about the fishing spot we call "fourplex investing" and the types of fish that it can bring in:

What is a Fourplex Unit and What Does it Look Like?

I'll be sure to give you a snippet of fourplex examples in this post; just scroll to the bottom to browse some of our recent fourplex units, videos, and plat maps.

A fourplex is a smaller residential unit with four doors, 4 apartments. Any more units, and the building will typically be deemed commercial. This is an important distinction as you read further…


Advantages of Investing in a Fourplex vs Other Multifamily Units:

Fourplex investment properties are the most lucrative because of their ease of financing. Fannie Mae will lend up to 75% LTV with a 30 yr amortization on a fourplex property, whereas a unit that is 5 or more doors will require commercial lending and may require 30% or more and will be amortized over 20-25 yrs with a balloon payment due typically in 5-10 years.

With that in mind, you're key incentive in a multi-unit investment should be CASHFLOW. At FIG we first make sure to find and invest in markets show steady growth and a promising future. In cities primed for rental units, the greatest benefit of fourplex investments is that they are built to survive all market cycles. So even when the market takes a dip or worse, you can count on sustaining consistent tenants (see how we do this below).

When the market surges upward? Fourplexes give a great opportunity to capture equity and leverage that toward additional property investments.

Financing a Fourplex Investment Property:

Let's take a look at what our friends at BiggerPockets have to say on the matter, "Many of these [Fourplex] units fall within the Freddie Mac and Fannie Mae conforming guidelines. This translates to more options, lower costs, and better interest rates.

Financing a multi-unit or fourplex can be very easy. Fully document your income, put 30% down, have perfect credit, and be the proud owner of your income generating property. What if you do not have 30% to put down? What if you are self employed and proving all of your income is a challenge? Let’s take a look at financing options that are outside the box: [read the rest of their article here]"

For our Idaho and Utah investments, our go-to guy is Lane Aldrich. Lane has assisted investors in securing over $80M in multifamily financing over the last 12 months. Shoot an email over to Steve Olson (solson@fig.us) if you have any specific questions about the financing process and what your options are.

We'll use Lane and First Colony Mortgage as a quick example as we share the role a mortgage company plays in the investment process so you can get a picture of what it's like to work with our preferred lender:

  1. A joint review of the pre-approval & financing procedure for securing your multifamily investment.

  2. Secure a pre-approval for both your construction loan & your Fannie Mae/Freddie Mac long term mortgage upon property completion.

  3. Submit your construction loan package to our construction banking partner when your property is nearing the construction phase.

  4. Provide competitive long term financing options when facilitating your permanent refinance loan upon completion of your property.

You can also review our past blog article on the fourplex investment process: Investing in a Fourplex: [A Step-by-Step Guide]

What Does a FIG Fourplex look like?

FIG hedges against risk by putting a homeowners association and professional property management company in charge of protecting and maintaining the exterior integrity of their projects so our investors can have a turn-key investment for many years. FIG’s developments appeal to a broad audience of investors, and we pride ourselves on quality construction and solid returns.

We'd love to help give you the tools and knowledge needed to break into the investment game. You deserve to have your nets filled and have an enjoyable process getting there. You've worked hard. You've come this far. Let us know what else you want to learn about by reaching out to someone on our team. Still have a question? Hop over here to Send a Message to a FIG Representative.

Below you'll find some an example of FIG projects!

Here's a glimpse at our Meridian Idaho project. This Video shows our most recent drone footage of The Brick Yard at Meridian!


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FIG DISCLAIMER: No investments are guaranteed to result in profits. Net operating income, cap rates, and internal rates of return are subject to fluctuation and may experience a wide range of change, including the potential for operating losses. Factors affecting investment returns include, without limitation, changes in interest rates, tenant vacancies and defaults, property management expenses, repair and maintenance costs, HOA expenses, litigation, insurance rates, and relative strength and weakness in the local and regional economy. Past performance is not a guarantee of future returns. FIG does not provide tax or legal advice, and none of the statements or information on our website or sales materials should be construed as tax or legal advice. All investors are encouraged to seek advice from their own tax and legal professionals. All estimated returns on investments in FIG projects are subject to change and may be significantly different from actual financial performance. FIG is a brand used for the purposes of marketing. FIG is not an actual company but is used to brand the investment strategy used by those marketed on this website. © 2020 FIG & RE/MAX Equity