Billions of dollars are searching for opportunities in the multifamily real estate sector. What’s driving so many accredited individual investors and big institutions to this alternative asset class now?
Perhaps more importantly, how can you ensure that you are doing it intelligently, and don’t just get financially trampled in the stampede?
Multifamily real estate investing has many advantages. Those commonly include the efficiencies and economies of scale, and tax benefits, as well as strong returns.
Right now, savvy investors are specifically seeking out assets in this sector for the hard collateral and downside protection as well. Some have had a fun run in stocks, startups, crypto and NFTs. They recognize that now is the time to move to secure assets.
Real assets have downside protection. One of the great perks of this space is that multifamily can continue producing the same income and yields, regardless of temporary paper value fluctuations.
COVID also really drove home the need for passive income, and multiple streams of income. It is a much higher priority now.
With so much global and economic uncertainty many are seeking recession resistant assets too. What’s attractive about multifamily is that it will grow and benefit if the economy keeps growing. If things tank, then it can benefit from more demand too.
Being Successful In Multifamily Investing
Regardless of the potential, any investment is only as profitable and great as the execution.
In this current rush many are likely to ultimately fail or at least see the net underperforming their expectations.
There are four things which will especially make the difference in this market.
Current inflation and supply chain trends are making it even more pivotal to have developed loyal relationships. Not only for inventory, but critically for contractors, materials suppliers and vendors.
Be disciplined and don’t overpay. The price range and quality of property and area you are operating in will also make every bit of difference when it comes to the upside growth potential, and downside protection.
Make Your Money When You Buy
Gambling is for casinos, crypto, and stocks. A real investment means making your money when you buy. This is not only about the price and terms you pay, but the occupancy rates and cash flow you are buying, and having multiple exit strategies.
With many new and large players trying to move into this space, it is more pivotal than ever to have competitive operations and property management. Can you operate more efficiently and profitably than others? It is not about being cheap, but about equally outperforming with your customers.
Find out more about investing in secured debt and real estate, go to NNG Capital Fund