There is a lot more talk about multifamily property investments today. Why is that? Why are they becoming so much more attractive now?
From big funds to corporate giants, to individual professionals and syndicates, all eyes seem to be turning to multifamily. Here are just six reasons for this curve.
1. Efficiency in Investing
There are hundreds of billions in capital designated for investing in real estate this year. Money managers have to be efficient. They can’t afford to waste countless hours and weeks to pick up just one $200,000 unit. They need to be efficient with their time and get that capital to work swiftly.
2. The Fall of Other Asset Classes
Many investors and institutions which once invested heavily in other types of commercial real estate are seeing how much things are changing. Stand-alone retail, shopping plazas, and malls are desperately battling vacancies. We no longer need conventional office space. Many of the hottest startups today operate fully on outsourced and remote teams. Even tech giants like Apple and Amazon have increasingly been growing their share of remote workers. Industrial real estate faces a lot of potential challenges with new regulations, and no one knows how drastically that may change with the 2020 presidential election.
Regardless of common sense investment principles, it is hard for investors not to seek those big home runs advertised in tech startups, overvalued stocks and cryptocurrencies. They are long shot bets that are highly risky, but potentially rewarding if you manage to score the one scratch off like investment that pays out. That has to be balanced by stable investments like multifamily apartments.
4. Supply and Demand
Successful investing is all about supply and demand. We are in a time of huge demand for rental housing, and affordable housing. There just isn’t enough out there. This dynamic isn’t going away. It’s only likely to intensify ahead. Be the supplier of apartments, and you can be well compensated.
We’d all like a little more confidence and control over our futures and finances, right? Well, multifamily investing offers this on a level investors really can’t find elsewhere. Not even in single-family rental homes. Multifamily offers a lot of control over asset performance and value, no matter what the markets are doing.
6. Cash Flow
The problem with the bulk of portfolio investments today is that they don’t offer income. They are long term bets. If there is one thing we need more than a big nest egg, it is income. Even if you are Warren Buffett or Mark Zuckerberg, you’ll soon be broke without cash flow coming in. Multifamily investing means getting into profitable investments, often with returns and partial returns of capital coming back very fast, with ongoing passive income you can live on or reinvest, without shrinking your capital.
ABOUT THE AUTHOR
Bill Zahller is the President of Park Capital Properties and resides in Asheville, NC. As a Multifamily Real Estate Investor and Syndicator, he founded Park Capital Properties in 2016 after 14 years involvement in real estate investment. He works with accredited investors and professionals who are interested in real estate investment, diversification, and financial freedom.
Bill has been flying since high school. His father was a Naval Aviator and Captain for TWA. Bill has been flying professionally for over 25 years, 23 of those at his current company. He has accumulated over 12,000 hours and 7 Jet type ratings. He has also held Instructor, IOE Instructor and NRFO pilot positions with a large fractional flight company. He is currently flying the Global 6000 in a long range mission capacity. This keeps it interesting – one week its Beijing or Sydney; the next Rio or Rome.
Bill is also the founder of the Asheville Multifamily Investor Club. Visit www.ParkCapitalProperties.com for more information.