The Multifamily Market Update Secret is Out!
groundswell assets
passively invest in multifamily real estate reduced taxes. equity growth. quarterly cashflow. portfolio diversification.
Aloha and Good Morning,
I hope this email finds you well as our industry continues to navigate through the economic waves of change. As you are aware, the real estate industry has been facing crashing waves in the face of rising inflation and declining sales volume, but I am confident that we will continue to sail through these challenges and come out anchored in safe waters on the other side.
Inflation rose 5.4% in January, which is still above the 2% target the Fed wants to be at. Despite this, there was a surprise increase in consumer spending in January, and unemployment remains low. While the economic backdrop doesn't give much confidence to anyone, we can see from the PCE inflation chart below that overall inflation is trending downwards.
On the multifamily front, we have seen a decline in sales volume as sellers are not willing to sell at discounted prices and buyers are not willing to buy at returns that don't make sense.
In addition, we have been focusing on our operations, building out our team, and working with our operational partners to drive collections ensuring we survive in this market.
This year, we're harnessing our creativity and sharpening our pencils to offer you lucrative investment opportunities. Our underwriting process assumes a 3% expense growth (long-term average) and zero rent growth (for the first 2 years). However, with expenses skyrocketing and rent growth declining, we're facing an all-hands-on-deck situation. It's a challenge we're ready to tackle head-on.
Despite the challenges, it's important to remember that these things never last forever. Short-term volatility can easily sway us from the bigger picture, but we are investing for the long term, and I am confident that we will come out stronger.
In the meantime, I encourage you to stay tuned for an exciting announcement about new team members and potential deals in the pipeline!
Don't forget to drop into the weekly wave?"14 Steps to Multifamily Acquisition - Step #9 Due Diligence" ?to continue to stay informed and educated on the best multifamily investment strategies.
Thanks for reading and have an excellent week!
Benjamin Yeager
By Benjamin Yeager:
"Are you considering investing in multifamily properties but unsure of where to start? Look no further. As a multifamily syndication expert, I've got you covered. In this comprehensive due diligence guide, I'll walk you through the essential steps we utilize to perform due diligence. From financial analysis to physical inspections to negotiation and closing, you'll gain invaluable insights into the multifamily investment process that will help you make informed decisions and build a profitable portfolio. Don't miss out on this opportunity to take your multifamily investment game to the next level."
In the News...
Top 5 Markets for Multifamily Investment Growth
The multifamily real estate market has remained a strong player in the commercial real estate sector, with $69 billion in investment volume in the third quarter of 2022 — the highest volume recorded across all sectors, according to CBRE’s third-quarter capital markets report.?Despite the Federal Reserve increasing interest rates to a record high of 3.75% to 4.25%, investors are still seeing opportunities in the multifamily space as rental demand is still steady across the U.S. The higher cost of capital, coupled with inflation and stagnating wage growth, is driving more people to rent rather than buy.
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