January 30, 2023

Multi-Family Buildings: The Future Of Residential Real Estate

Constructing multi-family dwellings is essential in numerous locations because it can help alleviate the issue of overcrowding or inadequate housing. It can also provide a good return on investment for developers, as well as generate income from rental fees.

Now, the cost of constructing multi-family dwellings varies depending on the size and quality of the building. It typically requires significant upfront investment in engineering and design, materials, labor, building permits, and other necessary costs. Once these costs are taken into account and a potential return on investment is calculated, the profitability of constructing multi-family dwellings can be determined.

In this article, we’re breaking down the types of multi-family homes, the pros and cons of multi-family buildings, who are multi-family homes best for, and how Pasquini Engineering, Inc. can help.

What Is Multi-Family Housing

Multi-family housing is a type of residential construction development that includes multiple dwellings within a single building or complex. They can provide an affordable solution for individuals and families who are looking for a place to live in an urban area and also serve as an effective way to maximize land use in areas that are already densely populated.

Additionally, the benefits of multi-family housing can be seen in its ability to reduce traffic congestion and air pollution, while providing safe and secure living spaces for all residents.

Types Of Multi-Family Homes

Multi Family Buildings Pasquini Engineering

Also known as multifamily dwellings, multi-family homes are residential buildings that contain more than one living unit. These can range from duplexes, which are two units side-by-side or stacked on top of each other, to large apartment complexes with dozens of different apartments in the same building and townhouses, which also differ from hotels and motels in that the stay is a minimum of 30 days.

Popular types of multi-family homes include townhomes, condominiums, and low-rise apartments. Townhomes typically consist of two to four units that are connected by common walls and shared outdoor spaces. Condominiums are similar to apartments but usually offer more amenities like pools and gyms along with individual ownership of units. Low-rise apartments offer a variety of floor plans and layouts in small buildings, while high-rise apartments often have elevators and large lobbies with doormen or concierge services.

Multi-Family vs. Single-Family Homes

Multi-family homes and single-family homes offer different advantages to homeowners. Multi-family homes are typically larger and can accommodate more people, making them an attractive option for those living in a larger household or with extended family. Additionally, the cost of multi-family homes is usually lower than that of single-family homes since they often share common amenities, such as parking and laundry facilities.

On the other hand, single-family homes provide more privacy and autonomy to their owners as no one else is sharing the space, plus they often have bigger yards for families to enjoy. Furthermore, single-family homes tend to appreciate at a higher rate than multi-family homes due to their exclusivity and greater demand in many areas. Also, California has modified single-family zoning to allow for an accessory dwelling unit or two in most areas, so adding a unit to a single-family home property is feasible.

Ultimately, deciding between a multi-family home or a single-family home depends on individual needs and preferences.

What Are The Pros And Cons Of Multi-Family Buildings

The maximum number of units is typically determined by the city/county zoning and land use designations. When you first look at an individual property, you must check these designations and various requirements, like parking, setbacks, open space, trash enclosures, and required patio area just to name a few. 

The neighboring property, depending upon its designation, can affect the setbacks or design standards which you must meet as well. Also, make sure to ask the right questions:

  • Does the existing surrounding infrastructure (sewer, water, etc.) have the capacity to handle the increased demand that the project will entail?
  • What type of studies will the governing agencies require? (environmental, geotechnical, and traffic studies)
  • How will the neighbors react to a project such as this? That is if the project must go to a public hearing. Will the neighbors support it, or are they a NIMBY neighborhood. They may want additional housing, just not right next to their own houses.

Now, when you’re choosing the type of units, a number of things must be considered:

  • What demographic are you trying to meet? High-end, standard, or low income units?
  • If they are low income units, does the governing agency require any additional amenities?
  • Will you be receiving low interest government loans?
  • What additional costs will the project entail, such as labor type (prevailing wages) or possibly meeting special access requirements or other items?
  • With high end units, what do these renters expect from the property? A gym, sauna, the size and type of pool, tennis courts, and clubhouse are among some of these amenities that might be incorporated. 
  • For traditional complexes, what amenities will meet expectations as well?

Another design criteria that will affect the overall layout is the number of bedrooms and typical size of units. Determine how many 1, 2, and 3 bedroom units should be provided.

Who Are Multi-Family Homes Best For

Residential Real Estate Pasquini Engineering

Multi-family real estate is best for investors and multi-generational families. They offer the potential to generate an income from rental properties, while also being able to provide a home for extended family members.

Real Estate Investors

Multi-family properties can be a great real estate investment opportunity for investors looking to increase their income through rental properties.

Investors generally come in two different types: small investors who typically look for developments of four units or less and large development investors who typically look for five units and larger projects.  There are some larger developers that subdivide lots into multiple four unit properties. 

Typically, the reason investors look for either four or less unit properties is financing. Four units and less meet HUD guidelines for residential financing and sometimes include FHA financed owner-occupied properties. Larger projects are financed through commercial loans and are regulated differently.

No matter what type of investment you choose, they all offer an attractive option for those seeking affordable housing or an excellent investment opportunity.

Multi-Generational Families 

Banks would allow multiple families from one family to purchase up to four units, each family living in one of the units, and finance the property under one loan. This allows a multi-generational family to pull together and purchase a property they might not individually be able to afford.

Multi-Family Building Development With Pasquini Engineering, Inc.

As your trusted design professional, we’ve provided licensed design professional drawings for all aspects of multi-family projects for over 30 years. Having permitted hundreds of smaller projects (2-4 housing units) and many large multi-family apartment complexes (up to 400 units within one complex), we continually work to help our clients make decisions with ‘their eyes wide open.’ Meaning, we guide our clients through each and every hurdle that the project may face in getting all of the permitting accomplished.

Unlike other engineering firms, we treat each project as if we were the investor. Our approach is putting ourselves in the position of taking the financial risk in purchasing a property, then looking at what our client is asking differently. We challenge their assumptions, making sure the client is fully aware of the potential costs, delays, and also the rewards for taking the risk in developing a property. 

Too often, people assume that developers only make money on an investment property and take no risks. Currently, there are many governmental rules and regulations that our investors/clients may or may not even be aware of. So, we do our best to inform them of these before they sign our proposal. That way, they have ‘their eyes wide open’ as they go forward with their project.


Examining the various perspectives that have been brought up should be done prior to investing in a project of this magnitude. It is more advantageous than going into the situation without any prior knowledge. So, be sure to familiarize yourself with the local ordinances and laws relevant to your construction and assess the long-term benefits of your expenditure.

Keep in mind, Pasquini Engineering, Inc. associates are a group of accredited experts who are able to help you with the authorization procedure and establishment of your next multi-family property. Contact us today for a free quote.


DISCLAIMER: Pasquini Engineering, Inc. is licensed to work in the following states: California, Oregon, Florida, Arizona, Nevada, and Texas. All the information on Pasquini Engineering, Inc. is published for general information purposes only, and will not be liable for any losses and/or damages in connection with the use of our website. By using our website, you hereby consent to our disclaimer and agree to its terms.

Skip to content