Real Estate is a physical asset. It is a physical thing in a specific place. You can see it, touch it, and if you feel up to it, you can taste it. As a physical asset, Real Estate is insured. If the unthinkable happens and the asset is damaged or destroyed, insurance covers the repairs or replacement. Unlike paper assets like stocks, bonds, or mutual funds, the value is entirely out of your control, and you are at the mercy of the whims of the market.
- Diversification - Multifamily investments make an excellent diversification for your investment portfolio, spreading risk across asset classes.
- Tax-Advantaged - Depreciation shows as a loss on paper that you may take to offset your gains. Speak to your certified tax consultant for details.
- Economy of Scale - We love single-family rentals and small multifamily residential rentals. But, when a single-family rental is vacant, income drops to zero until occupied. With multifamily, we desire a small number of vacancies to improve our market position and returns. One vacant unit out of fifty or one-hundred or four-hundred becomes an advantage.
- Other People's Money - We borrow as much as 80% of the purchase plus expenses from our lenders. While we may own 20% and the bank 80%, we get 100% of the depreciation. Lenders also act as an accountability forcing function. Lenders work with us to provide the best possible living experience as a team member in the asset.
- Other People's Time - A multifamily asset is a business, not a job. As such, we have an entire team to perform our day-to-day operations and management.
- Customer Delight - We delight in delighting our customers. Participating in building and operating a robust multifamily asset with delighted residents is incredibly satisfying.
- Cash Flow, Appreciation, or Both - As an investor in a multifamily, you receive regular cash flow distributions from rents and other income. Some investments focus on cash flow, others on appreciation, and many achieve both. Our goal is to increase net operating income (NOI), which increases the asset's value and typically sells in two to five years, returning the sale proceeds to the investors on top of any cash flow along the journey.
- Hedge Against Inflation - Multifamily is an excellent hedge against inflation. We structure our debt with fixed interest rates or interest caps to provide the greatest benefit during our hold period. Prices and expenses go up, but so do wages and rents. Meanwhile, debt that lags inflation decreases the value of the debt, and we pay with inflated dollars.
- Protection - As a passive investor, you are a limited partner in a limited liability corporation. See your attorney for details.
- Passive - Passive investment in multifamily is one of the best ways for a busy professional to put money to work. Investing takes very little time, and you reap the rewards. As sponsors, we provide all the numbers and data you could want for those who wish to dig in; after all, it is your money at work, but you can also sit back and watch the results.