5 West Group’s Post

🔍 Why invest in Multifamily? Why Now? 🏢💡 In a world where the value of shelter cannot be overstated, the multifamily real estate sector stands out not just as an option, but as a necessity. Here's why: 📈 𝗨𝗻𝗽𝗿𝗲𝗰𝗲𝗱𝗲𝗻𝘁𝗲𝗱 𝗗𝗲𝗺𝗮𝗻𝗱 𝗠𝗲𝗲𝘁𝘀 𝗦𝗰𝗮𝗿𝗰𝗲 𝗦𝘂𝗽𝗽𝗹𝘆 The past few years have revealed a stark reality: a severe housing shortage across the United States, exacerbated by a pandemic-induced exodus from cities and a spike in single-family home prices. This shortage is not a temporary blip but a profound shift, emphasizing the critical need for multifamily housing solutions. 💰 𝗘𝗰𝗼𝗻𝗼𝗺𝗶𝗰 𝗦𝗵𝗶𝗳𝘁𝘀 𝗮𝗻𝗱 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 𝗜𝗺𝗽𝗹𝗶𝗰𝗮𝘁𝗶𝗼𝗻𝘀 As interest rates have climbed sharply, the dream of home ownership has drifted further away for many, with the median home price still significantly higher than pre-pandemic levels despite recent decreases. This economic turbulence has made multifamily properties an even more attractive investment, offering both stability and inflation protection in uncertain times. 🛠️ 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 𝗶𝗻 𝗮𝗻 𝗜𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻𝗮𝗿𝘆 𝗘𝗿𝗮 Multifamily properties offer a unique hedge against inflation. With the ability to adjust rents annually, investors can align more closely with current market conditions, ensuring a steady flow of income that keeps pace with inflation. 🏡 𝗔𝗳𝗳𝗼𝗿𝗱𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗮𝘁 𝘁𝗵𝗲 𝗛𝗲𝗮𝗿𝘁 𝗼𝗳 𝗗𝗲𝗰𝗶𝘀𝗶𝗼𝗻 𝗠𝗮𝗸𝗶𝗻𝗴 Our strategy revolves around ensuring that the rents of our multifamily investments remain within the affordability range of 25-30% of area median income. This focus on affordability is crucial, particularly in today's economic landscape, where many find homeownership out of reach. Let's discuss how strategic investments in multifamily properties can be a cornerstone of your investment portfolio and a step towards securing your financial future. Pic was taken on Wall St in New York on a trip for my son's 16th birthday. #RealEstateInvestment #MultifamilyRealEstate #MarketInsights #StrategicInvestment #FinancialStability

The multifamily market is poised for a serious rebound in 2025, and now is the time to pay attention. According to recent findings from the Urban Land Institute, 2025 could be a point of inflection for #Multifamily After a couple of tough years, we’re finally seeing key indicators of recovery: The Fed’s recent rate cuts have re-energized the market, and debt financing is back. That means big deals are making a comeback, and large portfolio transactions are on the rise. In 2024 alone, nearly $40 billion in assets exchanged hands, and with stabilized cap rates, sales volume is continuing to climb. On top of that, Gen Z is driving demand in ways we haven’t seen since 2000. Occupancy rates are holding strong at 94%, and apartment absorption rates are setting records. But here’s the kicker—this market isn’t just about demand. 2025 is all about operational efficiency. The properties that thrive will be the ones that can navigate strong demand while keeping operations lean and efficient. For savvy investors, there’s a huge opportunity to turn around underperforming assets. Next year should represent a return to the norm for the apartment market as strong demand continues to manage the near-term supply wave and fundamentals stabilize. Declining interest rates, plus a market with much friendlier prices than in the early part of the decade, should yield a return to normal for the capital markets. If you’re ready to take action, 2025 is the year to do it.

Well said Emily Logue ! Could not agree more. We want the on-site leasing staff to be primarily focused on the tenant experience but also realize many sites can’t financially support the other different and important functions such as social media, etc. but with a centralized program the site can help support a proportional share. But one of many good examples of how this approach can work. Hands on Asset Management and supporting our management teams will be the game changer (always has been, but even more critical now)

It's all over your feed - a multifamily rebound is imminent and I have to agree....all signs point to a strong 2025 AND I AM HERE FOR IT. Todd Mikelonis highlights this in one of his latest posts but what I especially like about his perspective is that he feels the key to success in 2025 is going to be in operational efficiencies and I couldn't agree more with this. He states that the properties that will thrive will be the ones that can navigate strong demand while keeping operations lean and efficient. I am going to double down on this and also want to add that operational efficiencies are about more than just managing income and expenses. We as owners, asset managers, sponsors, and/or developers MUST do a better job of setting up our operating partners for success. We have to do a better job of putting them in a position to focus on their core business and allow them to lean into their strengths as property management professionals. We have to do a better job of supporting them as we go to market with adequate staffing, clear and consistent timelines, and by removing or lessening the burden of left-over or last minute construction projects. We need to provide them with cohesive tools and resources to market the project effectively FROM DAY ONE, we need to provide them with adequate budgets to garner the necessary exposure needed to achieve our predetermined leasing goals, and we need to provide them with support and advocacy as they focus on day to day management, sales, and the overall resident experience. When staffing these projects, we need to think about incentivizing our team(s) in alignment with our project goals. How can we empower our operating PARTNERS to work alongside us as we capitalize on what should be a great year for multi-family? In addition to what I think we can do on the owner/sponsor end, I think property management companies can and need to do a better job of supporting and advocating for their own team(s). Todd and his team at CHARLESGATE have a pretty good thing going with their "POD model" (which you can read about on the Charlesgate blog) - from my POV - it is the best approach I have seen from a management group to date. The POD model was created to break the traditional, overburdened staffing model. Rather than expecting one person to handle leasing, management, marketing, reporting, events, and resident relations, they have centralized specific functions with dedicated roles, allowing the on site team to focus on their strengths and in turn creating operational precision. By structuring teams with specific roles—whether in leasing, maintenance, or resident services—this ensures nothing slips through the cracks. This level of organization not only improves the resident experience but also helps maintain proper staffing levels to prevent burnout. I love to see this and while it may not be perfect, I commend their team on forging their own path and exploring better ways of doing business.

The multifamily market is showing resilience and adaptability in the face of changing conditions. According to the latest NMHC Quarterly Survey, apartment deal flow has increased for the third consecutive quarter, despite loosening market conditions . Key takeaways: 41% of respondents reported higher sales volume compared to the previous three months. The Market Tightness Index rose to 49, indicating a slight improvement in market conditions. 31% of respondents observed tighter markets, while 33% reported looser conditions. The Equity Financing Index increased to 54, with 23% reporting more available equity financing. The Debt Financing Index remained below 50, suggesting continued challenges in debt markets. While the multifamily sector faces headwinds from new supply and economic uncertainties, these findings suggest a gradual stabilization and potential for growth. As industry professionals, it's crucial to stay informed about these trends and adapt strategies accordingly. What are your thoughts on the current state of the multifamily market? Are you seeing similar trends in your local area? #MultifamilyMarket #RealEstateInvestment #MarketTrends #NMHC https://lnkd.in/eX7ZYVSP

Despite the much discussed and well documented demand-supply gap in #affordablehousing, it is still a common assumption amongst investors that allocating capital to affordable multifamily means sacrificing returns. But if there is one thing that I learned from all those years of finance and economic courses, it is that when there is a persistent gap between supply and demand for something, there is probably money to made by helping fill the gap. Looking at NCREIF data from 2008 to 2024, I find that the most affordable multifamily properties (defined as affordable to people earning 80% or less of area median income) actually produced much better returns (239 basis points per year better!) than the least affordable (defined as only affordable at more than 120% of AMI). Far from sacrificing returns, investors would have left money on the table by not investing in more affordable housing. As with most things, the “why” of the outperformance has a lot of facets, but I think a major component is the superior long term growth in NOI exhibited by affordable housing as shown in the chart below. NOI per unit in affordable housing doesn’t grow quickly (not pushing rents to the max and keeping them affordable is, after all, is part of the strategy), but it grows steadily and is not subject to the same cycles seen in the higher end of the multifamily market. This is “The Tortoise and the Hare” story come to life. Slow, steady (some might even say boring) growth in NOI per unit in affordable has led to an average long-term growth rate that is far higher than that seen in less affordable properties. Affordable housing just chugs along through the cycle – that doesn’t create much excitement for those trying to time the markets, but it has served long-term investors very well. Affordable housing may be one of the more obvious cases of investors doing well by doing good.     You can check out the details of my analysis and the full results in my article in the latest issue of the PREA Quarterly from PENSION REAL ESTATE ASSOCIATION (PREA) at the link https://lnkd.in/eXfpX3CB .

🏢 Multifamily Absorption is Surging! Here’s What It Means for Investors 📊 Key Highlights from Q1 2024 Record Absorption: Nearly 104,000 apartments were absorbed in Q1, shattering the 30-year average of 12,500. Reduced Vacancy Time: The average apartment sat idle for only 28 days, down from 34 days in December 2023. Increased Demand: New lease applications per unit hit an eight-month high, and renewal rates were the highest since August 2023. New Supply Boom: Over 135,000 units were completed in Q1, the highest quarterly record ever. 🤔 What Does This Mean for Multifamily Investors? High Demand: Strong absorption rates indicate robust demand for multifamily housing. This is a positive sign for potential rental income. Quick Turnovers: Reduced vacancy time means properties are rented out faster, improving cash flow stability for investors. New Supply Impact: The influx of new units can affect vacancy rates and rent prices. However, it also shows that developers see long-term potential in the market. Concessions Rising: With more supply, some properties are offering concessions. This could be a sign of market adjustment and competition. Market Clustering: Key markets like Atlanta, Austin, and Dallas-Fort Worth are seeing the most construction, indicating hot spots for investment. 📈 How 7fold Realty Advisors Can Help At 7fold Realty Advisors, we help you navigate these trends: Expert Analysis: We provide insights into market dynamics to make informed investment decisions. Strategic Investments: We focus on high-demand markets to maximize your returns. Investor Education: We offer resources to help you understand the multifamily landscape. Pic is of Hayden Lake Country Club. This is where I will be later today. #RealEstateInvesting #Multifamily #InvestmentStrategy #7foldRealty #MarketTrends #PassiveIncome

AvalonBay Communities, Inc. highlighted, "operating momentum through the first half of the year has been driven by better-than-expected demand." 2nd quarter earnings calls from leading multifamily REITs reveal that the strong performance observed in the first quarter carried into the peak leasing season. Robust apartment demand, driven by employment growth, wage increases, and in-migration continue to be key factors, even amid economic uncertainty.

The real estate market in Austin, Texas is currently experiencing an oversupply of apartment buildings, posing a challenge. Despite this, experts predict that the market will gradually stabilize by 2024 due to the city's population growth and changing investment strategies. Austin's market resilience and emerging trends could shape the future of multifamily real estate. Read on:

Hey Y'all! Investing in multifamily real estate through a self-directed IRA is a strategic move, especially in North Carolina. Here's 6 reasons why: 1. **Diverse Economy:** North Carolina boasts a diverse economy with sectors like technology, finance, healthcare, and manufacturing. This diversity provides stability and growth potential for multifamily investments. 2. **Population Growth:** The state has been experiencing steady population growth, driving demand for rental properties. This trend is particularly strong in urban centers and suburban areas, making multifamily assets a lucrative investment choice. 3. **Stable Real Estate Market:** Despite national market fluctuations, North Carolina's real estate market has shown resilience and consistent appreciation over the years, offering a secure investment environment. 4. **Tax Advantages:** Investing through a self-directed IRA brings tax benefits, such as tax-deferred or tax-free growth, depending on the account type. This can significantly enhance your returns over time. 5. **Rental Demand:** With a growing population, there's a continuous demand for rental housing. Multifamily properties, especially in desirable locations, can attract stable, long-term tenants, ensuring a steady income stream. 6. **Diversification:** Adding multifamily real estate to your investment portfolio diversifies your assets, reducing overall risk. It's a tangible asset with the potential for both appreciation and consistent cash flow. Considering these factors, investing in multifamily properties with a self-directed IRA in North Carolina presents a compelling opportunity for investors looking for long-term growth, stability, and tax advantages. DM me to learn how you can use your IRA to invest in real estate! #RealEstateInvesting #SelfDirectedIRA #NorthCarolinaRealEstate #MultifamilyInvestments #FinancialFreedom