A multifamily property can best be described as a single, self-contained structure that has been intentionally divided into multiple private living spaces, each designed to accommodate a separate household. This classification encompasses familiar examples such as duplexes, triplexes, and fourplexes—dwellings that merge shared infrastructure with individual residences. Such properties form a cornerstone of contemporary housing and investment strategies because they uniquely combine communal efficiency with the individual autonomy of separate units.
In recent years, and particularly looking toward 2025, numerous real estate investors interviewed by Business Insider have identified multifamily housing as a central pillar of their portfolios. They regard this type of asset not merely as a means of generating rental income, but as a long-term hedge against escalating property prices and volatile interest rates. According to investor Josh Lupo—who, together with his wife Ali, focuses on multifamily investments in upstate New York—market conditions have shifted dramatically: “Prices and interest rates have essentially doubled in many markets in the last four or five years,” he observed. The Lupos, who founded The FI Couple and successfully achieved financial independence after eradicating six figures of student loan debt, attribute much of their progress to the stability and sustainability of multifamily investments. Josh explained that many properties which once delivered viable long-term returns, especially single-family rentals, no longer meet profitability thresholds under current financial conditions. The couple’s decision to pivot toward multifamily acquisitions has allowed them to balance risk, maximize efficiency, and secure consistent cash flow.
A similar story unfolds for real estate partners Connor Swofford and Pieter Louw, lifelong friends who embarked on their joint investing venture in 2024. In a remarkably short time, they have expanded their portfolio to include more than 20 units, primarily by purchasing, renovating, and managing multifamily properties in Buffalo, New York. Initially, their focus centered on small-scale properties—mainly duplexes—but as they developed deeper market insight, they progressively transitioned toward larger complexes with three or more units. “The cash flow and cap rates are a lot better,” Louw explained, emphasizing that their local market data demonstrates enhanced profitability and reduced volatility for larger multifamily holdings. To them, this strategy represents a more lucrative and secure approach to property investment, with greater resilience against unpredictable market shifts.
In Massachusetts, real estate investor, licensed agent, and coach Dana Bull refers to multifamily properties as “triple-headed monsters,” a metaphor she uses admiringly to describe their threefold financial advantage. These benefits include acquisition discounts—stemming from economies of scale—as well as improved operational efficiency and diversified income streams. Bull elaborates through a practical lens: when maintaining a three-family property, for example, the owner manages only one roof replacement, clears a single driveway, and oversees shared hallways instead of maintaining multiple separate structures. This consolidation of maintenance expenses drastically limits overhead costs while maximizing net returns, an essential consideration for investors seeking both growth and sustainability.
The path to acquiring a first multifamily property, Bull emphasizes, does not necessarily require extensive experience or massive capital reserves. She describes it as a “fantastic entry-level investing approach” accessible to ordinary homebuyers. Because duplexes, triplexes, and fourplexes fall under the legal category of residential real estate, buyers are eligible for residential loan programs—some requiring minimal down payments—if they plan to occupy part of the property themselves. This provision offers a strategic gateway into real estate investing without the financial barriers typically associated with purely commercial properties.
Mike Newton’s story illustrates this perfectly. Based just outside Seattle, Newton purchased a $450,000 duplex using owner-occupied financing, placing only a 5% down payment instead of the typical 20% required for investment properties. Unable to afford the larger deposit yet eager to begin building wealth, he chose to live in one of the duplex’s units while renting the other, which already had a tenant. This decision provided him with immediate cash flow from day one. To enhance his income even further, he rented a spare bedroom in his own unit to a roommate. As a result, the rent payments from both tenants covered most of his monthly mortgage obligation, freeing additional income for future investments. Within a short period, Newton scaled his holdings to more than ten rental units and continues to champion this strategy—commonly referred to as “house hacking”—as one of the safest and most realistic methods for entering the real estate market. By renting out part of their primary residence, aspiring investors can significantly offset or even fully eliminate their mortgage expenses while learning the fundamentals of property management.
However, the accessibility of multifamily opportunities varies by region. As Bull points out, New England’s real estate landscape is particularly rich in multifamily buildings constructed during the late nineteenth and early twentieth centuries. These structures were originally designed to efficiently house working-class families near dense urban centers such as Boston. In contrast, many areas across the United States lack a comparable volume of older multifamily inventory, prompting would-be investors to think creatively about achieving similar results. In such markets, individuals can adapt the house-hacking framework by adding accessory dwelling units (ADUs), converting basements or attics into rental spaces, or taking in roommates. The underlying objective remains constant: to leverage unused living space so that other occupants help pay down the mortgage, gradually transforming a personal residence into a self-sustaining wealth-building asset.
Ultimately, multifamily investing represents an adaptable, resilient, and financially intelligent strategy suited to both novice and experienced investors alike. Through disciplined management and innovative use of financing, it offers a gateway to long-term financial security, allowing investors to build substantial portfolios while sharing risk and expense among multiple income-producing units.
Sourse: https://www.businessinsider.com/real-estate-investing-multifamily-property-maximize-cash-flow-house-hack-2025-10
