🏘

Multifamily (2–20 Units) FSBO Guide

Small apartment buildings, duplexes, triplexes, and small multifamily sold by owner.

5.0%–8.0%

Typical Cap Rate

2–20 units

Typical Size

4%–6%

Broker Commission Saved

Overview

Small multifamily properties — duplexes through 20-unit apartment buildings — straddle the line between residential and commercial real estate. Properties with 5 or more units are typically financed commercially and valued using the income approach. FSBO sales are common, particularly for mom-and-pop landlords exiting after decades of ownership.

How to Sell Multifamily (2–20 Units) By Owner

Value Your Property

Research comparable sales and apply market cap rates. Multifamily (2–20 Units) typically trades at 5.0%–8.0%.

Prepare an Offering Memorandum

Create a professional OM with financials, photos, and key property data.

List on LoopNet & Crexi

Publish on the two largest commercial marketplaces to reach qualified buyers.

Negotiate & Sign an LOI

Exchange a Letter of Intent with the buyer to agree on price and major terms.

Due Diligence & Close

Allow 30–60 days for the buyer to complete due diligence, then close with an attorney or title company.

Key Due Diligence for Multifamily (2–20 Units)

Buyers will typically request the following during the 30–60 day due diligence period:

1Rent roll, lease terms, and current vs. market rents
2Vacancy history and local rental market comps
3Unit condition, deferred maintenance, and capital expenditure needs
4Local rent control and just-cause eviction laws
5Utility configuration (separately metered vs. owner-paid)
6Lead paint, asbestos, and habitability code compliance

Full due diligence checklist for commercial FSBO →

Who Buys Multifamily (2–20 Units)?

→

1031 exchange investors diversifying into multifamily

→

House hackers buying a duplex or triplex

→

Value-add investors targeting below-market rents

→

Syndicators and small apartment funds

Tax Strategy

Consider a 1031 Exchange

Selling multifamily (2–20 units) with capital gains? A 1031 exchange lets you defer both federal and state taxes by reinvesting in like-kind commercial property. You must engage a Qualified Intermediary before closing and identify replacement property within 45 days.

Learn About 1031 Exchanges Find a Qualified Intermediary ↗

Affiliate disclosure (FTC): The links below are sponsored partnerships. We may receive compensation if you click and make a purchase, at no additional cost to you. We only feature services we believe are useful to commercial FSBO buyers and sellers.

Recommended Tools & Services

LoopNet

Top Listing Site

The largest commercial real estate marketplace. List your property for sale or find available storefronts, office, and industrial space.

Browse LoopNet ↗

Crexi

Fast Growing

Crexi is a modern commercial marketplace with powerful analytics. Great for sellers wanting data-driven pricing and broad buyer reach.

Try Crexi ↗

1031 Exchange Corp

Tax Strategy

Defer capital gains taxes by reinvesting proceeds into a like-kind commercial property. Speak with a qualified intermediary before closing.

Find a QI ↗

Rocket Lawyer

Legal Docs

Commercial purchase agreements, letters of intent, lease agreements, and NDA templates — reviewed by attorneys at a fraction of the cost.

Get Legal Docs ↗

CCIM Institute

Education

The most recognized commercial real estate investment credential. CCIM-designated professionals lead the industry in commercial transactions.

CCIM Institute ↗

Frequently Asked Questions

Can I sell multifamily (2–20 units) by owner without a broker?▼

Yes. Property owners have the legal right to sell multifamily (2–20 units) without a licensed broker in all 50 states. Commercial transactions between sophisticated parties are specifically designed for direct negotiation. Saving a 4%–6% broker commission on a commercial property sale is a significant financial benefit.

What is a typical cap rate for multifamily (2–20 units)?▼

Multifamily (2–20 Units) typically trades at cap rates of 5.0%–8.0%. Cap rates vary significantly by market, location, lease terms, and property condition. Lower cap rates indicate lower perceived risk and higher demand markets. Always verify current market cap rates with recent comparable sales in your submarket.

What due diligence should a buyer perform on multifamily (2–20 units)?▼

Standard due diligence for multifamily (2–20 units) includes: Rent roll, lease terms, and current vs. market rents; Vacancy history and local rental market comps; Unit condition, deferred maintenance, and capital expenditure needs; and more. A typical commercial due diligence period runs 30–60 days.

Who are the typical buyers of multifamily (2–20 units)?▼

Common buyers of multifamily (2–20 units) include: 1031 exchange investors diversifying into multifamily, House hackers buying a duplex or triplex, Value-add investors targeting below-market rents, Syndicators and small apartment funds. Marketing directly to these buyer types through LoopNet and Crexi maximizes exposure.

Should I do a 1031 exchange when selling multifamily (2–20 units)?▼

If you have capital gains on the sale of multifamily (2–20 units), a 1031 exchange lets you defer federal (and often state) capital gains taxes by reinvesting proceeds into like-kind commercial property. You must identify replacement property within 45 days and close within 180 days of your sale. Engage a Qualified Intermediary before closing — you cannot touch the proceeds.

Other Property Types

🏪

Retail & Storefronts

5.5%–8.5%

🏢

Office Buildings

6.0%–9.0%

🏭

Industrial & Flex Space

5.5%–8.0%

🏙

Mixed-Use Properties

5.0%–7.5%

🌍

Commercial Land

N/A (land)

Disclaimer: Cap rate ranges and market data are general estimates for informational purposes only. Actual values vary by location, property condition, and market conditions. Always consult a licensed commercial appraiser, broker, and attorney before making real estate decisions. See our full disclaimer.