CoreLogic just took a look at how size and mortgage financing vary in multi-family properties. Here are its findings:
- There are +600,000 multi-family properties with at least 5 apartment units.
- 70% of these 600,000 multi-family properties have less than 25 apartments.
- 85% of the owners of multi-family properties own 5-49 apartment units.
- 15% of owners of multi-family properties own 50 apartment units.
- 16% of owners of multi-family properties own 84% of multi-family apartment units.
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CoreLogic found some 300,000 different owners of multi-family properties in its research.
- On average, owners of multi-family properties own two properties.
- Small properties tend to be owned by investors with 1-2 properties.
- 85% of all owners own no more than 50 apartment units and only 16% of all rental apartments.
- 15% of all owners (investor) own more than 50 units and they own 84% of all rental units.
- 1% of all owners (investors) own 1,000 apartment units and own one third of all apartment rental units.
Mortgage financing for multi-family properties varies by size:
- The smallest (5 apartment units or less) and the largest (1,000+ apartment units) have the least need for mortgage financing.
- Mortgage financing is most in demand by owners of properties with 100-500 apartment units.
- Owners with less than 25 units tend to obtain conventional loans from banks or private investors.
- Owners of medium sized properties (100-500 apartment units) tend to have access for financing from secondary markets that may both increase access to financing and reduce costs of financing.
- Owners of properties with 1,000+ apartment units tend to be financed by large investment or management firms that have cheaper alternatives for financing loans.
CoreLogic found that multi-family property size and mortgage financing need looked like this in Q3 2019:
- 5-9 units – 53%
- 10-99 units – 61%
- 100-199 units – 64.5%
- 200-299 units – 66.5%
- 300-399 units – 67%
- 400-499 units – 64%
- 500-599 units – 63.5%
- 600-699 units – 60%
- 700-799 units – 57%
- 1,000+ units – 55%
Thanks to CoreLogic’s Chief Economist Dr. Frank Nothaft for source data.
Also read: Multifamily Occupancy /climbs to Highest Levels Since 2000, Rents and Units Growing in These Multi-Family Markets, Podcast: 12 Signs You Have an Entrepreneurial Mindset
