Wholesaling Small Multifamily Properties in Florida

The short answer

Can you wholesale a small multifamily property in Florida?

Yes, and buildings with two to four units can still use residential financing, which widens your buyer pool. Tenants and leases come with the building.

Small multifamily deals are priced on income. Buyers look at gross rents, vacancy, taxes, insurance and repairs to find net operating income, then apply a cap rate. Collect leases, rent ledgers and expense records before you make a firm offer. Our net operating income guide shows how buyers do the math.

Florida adds a few twists. Insurance on older buildings can be expensive or hard to get, and non-homestead property taxes can rise faster than owners expect. Local rent control is preempted by state law, so rents follow the market. Many owners bought years ago at low prices and now hold big equity but thin cash flow. Our cap rate guide explains how buyers value these buildings.

The opportunity

Why small multifamily owners sell in Florida

Small multifamily owners are often individuals, not companies. Rising costs, aging buildings and tenant headaches push many to sell, even when the building is profitable on paper. In Jacksonville, Tampa and Orlando, many duplexes and fourplexes were built in the 1960s through the 1980s, so roofs, electrical panels and plumbing are reaching the end of their lives at the same time. Owners who planned to hold forever are now facing a large repair bill and a much higher insurance premium in the same year. A buyer who takes the building as it is, tenants included, solves both problems at once. Many of these owners also have a low tax basis, so they may want to talk with a tax adviser about options like a 1031 exchange before they sell.

Lead sources

Where to find small multifamily leads in Florida

• Property appraiser use codes. Filter for duplex, triplex and fourplex use codes in your county.
• Long-term owners. Owners who bought 15 or more years ago often have large equity.
• Eviction filings. Repeat eviction filings point to tired landlords.
• Code cases. Multifamily buildings with open code cases may need a new owner. See our code violation leads guide.
• Property managers. Managers know which owners want to sell.

Your exit

Who buys small multifamily properties in Florida

Landlords and small investors are your main buyers. Some use residential loans, some use DSCR loans, and some pay cash. Give them a clean rent roll and real expenses.

Owner-occupant buyers also like duplexes and fourplexes, since they can live in one unit and rent the rest. That can support a higher price. In Jacksonville neighborhoods near downtown and the beaches, owner-occupant buyers using FHA or VA loans compete for small multifamily, which pushes values up for well-kept buildings.

Step by step

How to start wholesaling small multifamily properties in Florida

1. Collect the numbers. Get leases, rent ledgers, expenses and insurance quotes.
2. Verify rents. Compare stated rents with bank deposits.
3. Inspect. Check roofs, electrical panels, plumbing and each unit with notice.
4. Run the numbers. Use the ARV calculator and the MAO calculator plus income analysis.
5. Get an insurance quote. Ask an agent for a quote before you set your price.
6. Sign and disclose. Sign with the owner and disclose in writing that you may assign.
7. Close and transfer. Close with an investor-friendly title company and transfer leases and deposits.

A Jacksonville landlord had owned a fourplex for 22 years. When his insurance premium nearly doubled and the roof needed replacing, he decided to sell.

You collected the leases and ledgers, verified the rents and got an insurance quote. With roof and panel work near $60,000, you signed at $412,000 with a written assignment disclosure.

A local investor paid $432,000 for the contract. Title transferred the four leases and deposits, and the owner retired.

Florida rules to know

Leases, deposits and rental rules

Under Florida’s landlord-tenant law, leases continue after a sale and the new owner becomes the landlord. Security deposits must transfer to the buyer or be handled as the law requires. Get tenant estoppel letters so the buyer knows the true terms, and make sure every unit’s deposit is accounted for before closing day.

Florida preempts local rent control, so rents follow the market. Some cities require rental registration or inspections, so check local rules. Our tenant-occupied property guide explains how to handle tenants during a sale.

Learn it with a mentor

Learn to underwrite income property

Multifamily deals depend on real numbers. Mentorship students send us the rent roll and expenses, and we help them price the deal for income buyers.

FAQ

Small Multifamily Properties in Florida: common questions

Keep going

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