If you're investing or buying real estate right now, chances are you’re working toward some version of financial freedom. 

Maybe you’ve flipped a few houses. Maybe you’ve got some single-family rentals or you’ve tried short-term rentals like Airbnbs. You also might just be getting started. That’s where I was years ago – flipping houses, buying rentals, and trying to figure out the best way to scale. 

In this post, I want to talk you through what I discovered about multifamily after flipping 3 dozen houses. I’ll share with you what I learned going through a deal by myself, the mistakes I made, and how multifamily works as a model. 

I Flipped 12 Houses a Year

I used to flip houses. I got really good at it and I ended up flipping 36 homes over 3 years. It was good money. But what I started noticing was how active it was. If I wasn’t buying, fixing, and selling, I wasn’t making anything. 

I wanted mailbox money. I wanted passive income like Robert Kiyosaki talked about in his book.

I thought, “Maybe I should build a rental portfolio instead.” So I ran the numbers and back then, one single-family house gave roughly $200/month in cash flow. If I wanted to replace what I was making with the house flipping, I’d need 40-50 houses to hit $10K/month in income. That’s a lot of houses, loans, and property management. 

But then how were these other investors making so much money in real estate if they weren’t doing rentals and flips? 

The First Multifamily Deal

I kept running into the same pain point: how do I grow my real estate without burning out? It was a question of scale. I kept asking myself that question until 2011 when one of my wholesalers sent me a 12-unit multifamily property. 

I’d never bought a multifamily building before, but I’d been to a few conferences so I said, “Sure, let’s try it.” I did it all on my own. No partners. No mentor. I figured, “I’ve flipped dozens of houses—I’ve got this.”

Turns out, I didn’t.

I bought in Washington, D.C. — a very tenant-friendly area. I didn’t know the market well, and my property manager didn’t have experience with Section 8 tenants. It took me 18 months of trial and error (and time in court) to stabilize the property. 

But then the property settled down. I started getting $1,500/month in passive income. That’s when it hit me: This is real cash flow—and I didn’t have to own 50 properties to get it.

What I Learned About Multifamily

After that deal, I started studying how multifamily really works. It turns out, it’s a different game than flipping or buying rentals one at a time. Here’s what I learned:

1. How Multifamily Generates Income

Multifamily offers multiple “profit centers.” In a typical syndication (a group investment where a few people do the work and others provide the capital), you get paid in four different ways if you’re on the general partner (GP) side:

• Acquisition Fee: This is a fee you get at closing for putting the deal together—usually 3% of the purchase price. On a $4 million deal, that’s $120,000. That gets split among the GP team.
  
• Cash Flow: After operating expenses and the investors get their preferred return, the GP shares in the ongoing monthly or quarterly profits.
  
• Equity at Sale: When the property sells (typically after 3–5 years), the GP team also shares in the profit—usually 20–30% of what’s left after paying investors back.
  
• Asset Management Fees: For overseeing operations, the GP earns an annual fee—say $12,000 per year on a property like this.
  

So on one $4 million deal, the total income to the GP team could look like this:

• $120,000 acquisition fee
  
• $200,000 cash flow over 5 years
  
• $200,000 profit from the sale
  
• $60,000 in asset management fees
  

That’s $580,000–600,000 from one deal—spread out over a few years.

2. You Don’t Need to Do It Alone

I say “team” because you don’t have to fund or find the deal by yourself. You can partner with someone who can raise money, and you bring the deal, or vice versa. This was a hard lesson for me. My first multifamily deal went sideways because I tried to do it all myself. But this model is built around partnerships.

Some people are great at finding deals. Others are good at raising capital. Some know how to manage properties or underwrite deals. Multifamily lets you team up and divide the work.

You can also leverage other people’s experience and track record. If you’re new, you don’t have to wait ten years to build a resume. You can partner with experienced operators and add value in other ways.

3. Why Property Management Works Better at Scale

Managing a single-family rental is tough. Most people can’t afford a full-time property manager, so they either hire part-time agents (who take a big cut) or do it themselves.

But with multifamily, the rent roll is high enough to bring in a professional management company. You’re not on call for leaky faucets or missed rent checks. And that’s what makes it more passive—not because it’s totally hands-off, but because you’re managing the manager, not each tenant.

My point in writing this isn’t to convince you to switch strategies. It’s just to show you how multifamily works and what it looks like behind the scenes. 

If you’re flipping, doing the BRRRR method, or managing rentals – that experience is valuable. You’ve already learned how real estate works. Multifamily uses lots of the same principles but just in a different way. 

For me, switching from flips to owning multifamily opened up a new level of freedom. 

If you want to go deeper into this topic, I walk through everything in the full video—from my first deal to the profit centers to how syndications are structured.

👉 Click the link below to watch it now.

To your success,

Michael Blank