How to Buy Your First Small Multifamily Property This Year (2-4 Units)

Dave Meyer (0:00)

There is one type of real estate deal that always works. Whether the markets are up, down, sideways, or whatever you call today's market, small multifamily investments can deliver great returns for independent investors like you. And there's a reason, these properties are designed for you. No homeowner wants a four unit, and no large Wall Street investors want it either. Small multifamily is the asset class made for small to medium size investors like all of us in the BiggerPockets community. Small multifamily works so well because it offers cash flow, tax benefits, appreciation, and relatively low risk. Plus, you can get the benefits of residential financing. It's so good, and an asset class, I think, is worth exploring for almost any portfolio goal. And luckily, they're not hard to buy or to manage either.

Am I overselling this right now?

I actually don't think so. I just really believe hard in small multifamily. And today on the show, I'm going to show you how, step by step, to buy an excellent small multifamily deal in 2026

Hey, everyone. Welcome back to the BiggerPockets Real Estate Podcast. I'm your host, Dave Meyer, Chief Investment Officer at BiggerPockets, real estate investor and housing market analyst. Today, we're talking about my bread and butter, my ride or die, my first deal, my most recent deal, small multifamilies. When I say small multifamily, I mean two to four units specifically, your duplexes, your triplexes, your fourplexes. These properties give you more scale than a single family rental. But at the same time, they're easier to acquire and less risky than buying a big multifamily apartment, like a 20 or 50 unit apartment building. And there are some really unique benefits to buying these kinds of properties, specifically when you stay under four units.

For most early career investors, this is a real sweet spot. And even for experienced investors, this could be a sweet spot. It is just a versatile asset class that is perfect for people pursuing financial freedom. And I am excited to get into it all with you today.

In this episode, I'll cover first and foremost why small multifamily is really my one true love. Then I'll give you a step-by-step roadmap for finding, analyzing, financing, and closing on small multifamily deals right here in 2026

I'll go over the common mistakes I see, a lot of newer investors who get into this make and how to avoid them. And by the end of this episode, you will have a complete roadmap for buying your first small multifamily property in 2026 Let's get to it.

So first up, why small multifamily here in 2026? Well, I got a lot of reasons, but I'm just going to start with one thing I think is often overlooked. And it's that this asset class, specifically two to four unit properties, are basically designed and built and made for people like us, for small to medium independent investors. Because most people who go out and buy a home as a primary residence aren't looking for a duplex or a four unit. They want the single family home with the yard and the picket fence and all of that. Meanwhile, the huge institutional investors who want to buy apartment buildings and be in the housing market, they can't scale to the size they want to be. They can't deploy enough of their capital, four units at a time. They have to go out and buy these bigger properties that are 20 or 50 or 100 or 500 units. And that leaves this really nice sweet spot for small independent investors, because we're the ones who love this asset class. Well, maybe you will at the end of this episode. I already love them, but a lot of small independent investors love this asset class because you're not facing that competition from homeowners, and you're not facing competition from the other side, from the institutional investors. And this creates that sweet spot for people like us to operate. The second big reason I love small multifamily is it allows you to scale, but you still get residential financing. We're seeing this all over the market right now, but commercial financing, when you go out and buy anything that is five units or bigger, that is a totally different type of loan. It's still a loan, but it looks very different. It has usually adjustable rate mortgages, there's often balloon payments, there's prepayment penalties. It is a totally different type of loan product. Now, it works if that's your game, if you really understand that and how to do that safely, that's totally fine. But generally speaking, I just think it is true that residential financing is better. If you stick to four units or fewer, you typically get better interest rates, and you can still get 30-year fixed rate debt, which not everyone uses, but is an excellent tool for real estate investors. I personally love fixed rate debt, where you can lock in your interest rate for the lifetime of your loan. Meaning that if you underwrite your deal well today, you know exactly what your biggest expense is going to be forever. Until you pay that off. That is not how it works in commercial real estate. Your loan rate, your interest rate adjusts. And so three or five or seven years down the road, you might be in for a rude awakening. Like every syndicator who bought something between 2020 and 2022 are realizing right now.