6 real estate investors say multifamily properties are better for cash flow and efficiency. They explain the most affordable way to buy one.

• Real estate investors are prioritizing multifamily properties for stronger cash flow.

• One investor calls them ‘triple-headed monsters’ due to their three main financial benefits.

• Owner-occupied financing and house hacking make multifamily investing accessible for beginners.

A multifamily property is a single building divided to house more than one family living separately — a duplex, for example, or a triplex or fourplex.

Several real estate investors whom Business Insider has spoken with are prioritizing this type of property, particularly in 2025.

“Prices and interest rates have essentially doubled in many markets in the last four or five years,” said Josh Lupo, who invests in multifamily properties in upstate New York with his wife, Ali.

The couple achieved financial independence after paying off six figures in student loans, partly thanks to their real estate portfolio. “The properties that used to make sense as long-term rentals, especially single-families, the numbers don’t really work anymore.”

Connor Swofford and Pieter Louw, childhood friends who began buying real estate together in 2024, have scaled to over 20 units by purchasing, renovating, and renting multifamily properties in Buffalo.

While they initially purchased a few duplexes, they’re now shying away from doubles and focusing on larger multifamily properties with at least three units.

“The cash flow and cap rates are a lot better,” said Louw, at least in their market. “Just looking at the numbers over the last year, it’s a more lucrative and safe investment.”

Massachusetts-based real estate investor, agent, and coach Dana Bull refers to multifamily properties as “triple-headed monsters” because of the three major financial benefits that come with this investment, including the acquisition discount and economies of scale.

Think about the maintenance required for a multifamily home versus a single-family home, she said: “If you buy a three-family, when the roof goes out, you only have one roof to replace. You have one driveway to shovel. You have the shared hallways to take care of.”

Buying multifamily properties isn’t just for seasoned investors.

Bull considers it a “fantastic entry-level investing approach.” Since duplexes, triplexes, and fourplexes fall under the bracket of residential real estate, “you’re able to utilize residential loans, including low down-payment programs, if you intend to occupy the property, which is incredibly powerful.”

That’s what Mike Newton did to acquire his first property: a $450,000 duplex outside Seattle. He didn’t have the savings to buy it as a true investment property, which would require a down payment of at least 20%. However, since he was planning on living in half of the duplex, he secured owner-occupied financing and put down just 5%.

After closing, he moved into one of the units. The other unit was already occupied by a tenant, meaning he started generating cash flow immediately. Plus, he found a roommate for his unit. The rent from his two tenants covered the majority of his monthly mortgage payment, allowing him to save more money for his next property.

Newton, who has expanded to over 10 units, considers this strategy, known as “house hacking,” one of “the safest ways that you can start investing in real estate.”

By renting a portion of your primary residence, you can offset or even completely eliminate your mortgage. It’s a relatively low-risk way to see if you enjoy being a landlord and managing tenants.

It’s worth noting that not all markets have an abundance of multifamily properties. The New England market happens to have a large inventory of these properties, explained Bull: “These buildings were created in the late 1800s and early 1900s as a way to economically house people in areas close to or around cities like Boston.”

If there aren’t multifamily properties in your area, you can still house hack a single-family home by adding an ADU or converting an unfinished basement into a rentable space — or, like Newton, finding a roommate. The name of the game is getting creative with your space so that, ultimately, other people are paying down your mortgage.

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