As a multifamily investor, you know that today’s market is more competitive than ever. To succeed in this market, it’s important to have a well-thought-out investment strategy and the right tools and resources at your disposal. At Falcon we believe in equipping our investors with as many tools and education as we can so that making the right choice for their portfolio needs comes easy. Below are some tips we would like to share with you to help you succeed in multifamily investing.
Have a well-thought-out investment strategy
Any investor looking to get involved in multifamily properties should have a well-thought-out investment strategy. This means taking the time to do your preliminary research for understanding the market you’re looking to potentially invest in..
You need to know which types of properties are in demand, what rental rates are achievable, and what the competition looks like. Without this knowledge, it will be difficult to make smart investment decisions.
Are you looking for:
All of the above?
Once you know what you’re hoping to get out of your investment, you can develop a strategy that targets those specific goals as you go through an offering memorandum for a potential investment. Succeeding in multifamily investing takes a little time, effort, and a thorough understanding of the market you will be investing in. But with a well-crafted investment strategy, it is certainly achievable.
Research the market and neighborhood
Before investing in any property, it is essential to do your research. This is especially true for multifamily properties, as there are a variety of factors to consider.
The first step is to evaluate the market. Some questions to consider are: Are rents rising or falling? What is the vacancy rate? What is the average rent for similar properties in the area? These are all important factors to consider when determining whether or not to invest in aparticular market. More than likely the investment you are interested in will have all of this and more in the investment deck. If you do not see it upon your review, be sure to reach out to a team member on the sponsor team (pro tip: most times their contact information is at the end of the deck ).
The second step is to research the neighborhood. Although an investment deck will have most of the research done for you, it is wise to also do a quick check for yourself to be sure you feel comfortable with the area. Some questions to consider are: What is the crime rate? Are there any planned developments that could impact the future value of the property? Is the population growing or shrinking?
By taking the time to research both the market and the neighborhood, you will greatly increase your chances of both feeling comfortable with your investment and also grow your trust and understanding of the sponsor team. Always remember their are no “dumb” questions and your sponsor group is always ready to answer any questions that may arise.
When it comes to multifamily investing, success isn’t always about making the biggest profits. Sometimes, it’s about minimizing your losses. I am sure you can relate to this given the current state of the market. That’s why one of the most important keys to success is staying disciplined.
By sticking to a strict budget and investing only in properties that meet your criteria, you can minimize your risk and maximize your chances of success as we know success looks different to everyone. When market downturns happen, keeping your investments in place and looking at the future benefits rather than the short-term impacts will help you maximize future returns.
Additionally, it’s important to stay focused on your goals. With so many properties on the market, it can be tempting to veer off course and invest in something that isn’t a good fit for your portfolio based on your investing strategy (mentioned earlier on). However, if you stay disciplined and stick to your plan, you’ll be much more likely to achieve your investment goals
Get help from professionals
If you’re thinking about investing in multifamily real estate this year, we are here to help and guide you. Multifamily properties are a popular choice for investors for a number of reasons. To name a few, They offer the potential for high returns, stable cash flow, and long-term appreciation.
However, investing in multifamily properties is also complex and comes with unique challenges. That’s why it’s important to get help from professionals who can guide you through the process and assist you in making sound investment decisions.
Several different professionals can help you succeed in multifamily investing. One of the best options to consider is working with an experienced syndication group that specializes in multifamily investments. They can help you find properties that meet your investment criteria and further your education of investing through the process. Plus, pooling your investment with other like-minded individuals can help mitigate risk while maximizing results.
Other options include finding a real-estate agent and management team to invest in the properties directly. While you may be able to earn a greater share of the profit margin, you run the risk of increased fees, more out-of-pocket expenses, managing tenants, and vacancies.
Falcon Capital LLC is a private equity firm based in Washington, DC that offers investors the opportunity to achieve financial freedom through dependable passive income from commercial real-estate investments.