Today’s multifamily market is tough. The good assets are highly competitive amongst buyers and are bid up to exorbitant numbers that should not make sense from an investment standpoint.
Because investors are chasing real assets, attempting dodge inflation and to get away from volatile stocks, they are now in the multifamily space, looking to get their hands on anything they can find in hot markets. This drives up the price and drives down cap rates, the rate of return investors are willing to receive against the price their investment.
How do wise multifamily investors fare in this market? Well, they stick to their criteria and investment principles. You cannot fix your investment if you overpay. Investors that overpay hope that future investors will pay more. They make the sacrifice today, sucking up the pain of tight cash flows and mediocre partner returns, for a big sell at the end of the hold period. It has worked for many, but at some point it stops.
Other investors are choosing to sit on the sidelines, saying this market makes no sense. While I agree that in general, multifamily assets are overpriced, we believe that there are still great deals to be found. We just have to look where others are not looking. This leads us to emerging markets, special niches such as student housing, or smaller unit sizes. Each of these unique multifamily features limit competition because the larger investors and the masses are looking for mid-to-large multifamily in the typical places: Texas, Florida, Arizona and so on.
As Jim Cramer says of the stock market, there is a bull market everywhere. Good investors know how to take advantage of current events and make opportunities. For this reason, in 2022, I am selling my personal single family rentals in Florida and focusing exclusively on new markets and the multifamily asset class as well as mis-priced and undervalued assets in other classes.
During these dynamic times, be prepared to pivot.
If you invest in stocks or other assets are seek to diversify your portfolio, achieve higher returns or get educated on the power of investing, sign up for our newsletter for regular updates on our business and to learn how you can passively invest and grow your wealth through passive investing.
God Bless Ukraine 🇺🇦
Subscribe to Our Channel 👇🏾
💡Invest Your Retirement w/ eQRP
Passive Investor Startup Guide
To find out more about what it looks like to invest as a passive investor in multifamily real estate, download our free Passive Investor Startup Guide here!
Popular Passive Investor Articles
- – Mindset: Freedom through passive investing
– What is multi-family syndication?
– Do I have to be accredited to invest in a syndication?
– How passive investors can find great sponsors
– What to look for in potential syndicators
– About Robinson Capital
If you invest in stocks or other assets are seek to diversify your portfolio, achieve higher returns or get educated on the power of real estate, subscribe to my articles for automatic updates on new weekly content. Also, sign up for our newsletter for regular updates on our business and to learn how you can passively invest and grow your wealth through real estate.
Rodney Robinson II