Inner SPARK December 2023
Spark Multifamily Investment Group
I help you achieve financial freedom and create the life of your dreams through passive real estate investments.
Hi Everyone
Laura and I hope you all had a wonderful holiday season and send best wishes for the New Year.
We just returned home from a visit to Charlottesville, Virginia after spending time with family and close friends. Charlottesville, VA is the home of Thomas Jefferson - who played a pivotal role in our nation’s history and founded the University of Virginia. Besides all the rich American history, Charlottesville has great natural beauty with the rolling hills surrounding the town. We enjoyed some wonderful meals with engaging conversations. Add it all up, and it was a special trip for Laura and I.
Here's a picture of Virigina Cenedella, Laura and I during our walk through the Winter Wander held at Boars Head Inn.
Laura and I wish you a very Happy and Prosperous 2024!
THE LATEST NEWS FROM SPARK
Greenville New Build Portfolio 1: 10 new build duplexes - Easley & Lyman
All 20 units have been fully leased and we have 100% occupancy!
Progressive Properties of Greenville did fabulous work to get to 100% occupancy during the historically slow Holiday leasing season. We are now stabilized and well-positioned as an excellent long term investment.
Spark Investment Group has another new build project under contract and construction is well underway. This project consists of 13 duplexes for a total of 26 units in Taylors, SC - 15 minutes from downtown Greenville.
Spark Investment Group would like to help more individuals and families increase their passive income, build wealth, and create financial freedom. Accordingly, we would very much appreciate any referrals you can make to Spark Investment Group in the new year.
This Month’s Newsletter
Once again, we’re delighted to offer educational content about multifamily investing to you through Inner Spark. Much of this content deals with the ever evolving multifamily market. After several boom years, we are entering a new phase of the economic cycle.
In this edition, you’ll find:
Silicon Valley Investor Shares His 2024 Predictions & Why Multifamily Is A Must
Listen in as Texas Gosai and I discuss a variety of real estate topics including the differences between 506b and 506c syndications, the importance of local market knowledge, and the benefits of having excellent partners in multifamily real estate.
Click the link to tune in.
领英推荐
Many Bet That the Federal Reserve Will Cut Rates Soon
Many financial experts anticipate the Federal Reserve Board will begin to reduce interest rates sometime in 2024. Notably, economists at Deutsche Bank are among those forecasting this change. They predict a significant reduction of 175 basis points from the current federal funds rate range of 5.25% to 5.5%. This adjustment would result in a new target range of 3.5% to 3.75%, a level that has not been seen since before November 3, 2022.
Despite these predictions, the Federal Reserve maintains that it is too soon to claim victory. This stance suggests a level of skepticism within the market regarding the stability of current economic conditions. The speculation around the potential rate cut indicates a level of uncertainty and anticipation within the financial sector.
Click the link to read the whole article below.
Leasing Surge in Mid-Priced Apartments with Improved Economy
The U.S. multifamily market in 2023 has experienced a significant increase in renter demand, particularly for mid-priced apartments rated three stars. This trend signifies a recovery from the sluggish market performance witnessed in the latter half of 2022. Mid-priced, three-star properties have seen a 77% surge in occupancy over the past year, with 260,000 more units being filled than vacated, which contrasts with the disappointing absorption of only 146,000 units in 2022.
The previous market slump was influenced by high inflation, increased oil prices, and fears of recession, all of which significantly impacted consumer confidence and demand, especially in mid- and low-priced properties. However, the rebound in 2023 has been driven by improved consumer confidence, lower inflation, strong wage growth, and reduced fears of recession. These factors have notably boosted the demand for three-star properties by 54,000 units in the first three quarters of the year. The high-end segment, consisting of four- and five-star properties, has remained stable due to the lower rent-to-income ratio of its renters.
Click the link below to read the whole article.
BTR Asset Class Poised to Become Institutionalized
Cushman & Wakefield predicts that the build-to-rent (BTR) property sector is set to grow beyond its current niche status, driven by increased interest from investors and a shift in renter perceptions of what constitutes a "rental home". Despite currently representing just 1% of the multifamily market, a new report suggests this figure is set to rise as the product continues to attract attention from developers. The report also acknowledges the volatility of BTR performance due to its small inventory, with nearly 20% of the existing BTR inventory under construction, roughly four times the level of the broader multifamily market.
The turnover rate for BTR is substantially lower than market-rate apartments, with renters viewing BTR properties more as a "home" and thus being more likely to renew their leases. In fact, Yardi reports a 64% renewal rate for BTR units, about 10% higher than the overall market. Considering inflation has increased turnover costs by nearly 20% year on year, property owners can significantly cut costs if their residents choose to stay put. Cushman & Wakefield's data aligns with CoreLogic's Single-Family Rent Index, which shows outperformance for the BTR sector compared to the traditional multifamily market.
Click the link below to read the whole article.