BiggerPockets

Multifamily The Investment of Choice for Many Commercial Investors

Sunday, June 12

Is anyone interested in starting a multifamily discussion forum here?  This property sector has been heating up lately, and is starting to attract big money from Canada, South America and even a few European and Asian countries.  Here in the Desert Southwest we are definitely seeing the Canadian influence in greater numbers as well as some capital from Asia, and of course institutional money.  At today's prices it is very reminiscent of the RTC days when over a period of 5-7 years millions in profits were made buying, rehabbing, stabilizing and ultimately selling these assets.

Here in the Phoenix MSA we have seen great success with trustee's sales, REO's, non-performing note sales, and even bankruptcy workouts.  Anyone who bought a building in the run-up between 2003 and 2008 (give or take) is more than likely upside down today and struggling to hang on.  If they can manage to avoid a financial/payment default, they still face a maturity default when their loan comes due and they are unable to refinance without adding significant new capital, which many view as throwing good money after bad - assuming they have the money to come up with in the first place.

Tremendous Opportunities In Current Multifamily Market

Saturday, January 29

Stay tuned as we bring you the latest news, statistics, market data and analysis of the Phoenix-area apartment market.  Over the past 24 months or so the market here has transitioned from a virtual free-fall to a gradual leveling off, although we are a long way from being out of the woods.

From the heady days of 2004 through early 2008 or so when condo-conversions, cheap money and "irrational exuberance" propelled the multifamily market to all-time highs, apartment prices across all categories and submarkets have fallen to 20 year lows.  Lenders have been foreclosing in record numbers, and this activity is expected to continue pretty much unabated through at least 2011.

Of course, this sort of distress in the market always leads to opportunity if you know where to look and are well-capitalized.  Financing is still extremely hard to come by for all but the best-located and stabilized projects, and lenders will almost always defer to the "all-cash, quick-close" offers in lieu of higher priced offers containing financing contingencies and longer closings.

We have experienced tremendous success in a few key areas: buying non-performing loans at pretty decent discounts to eventually get at the real estate, in addition to short-sales, trustee's sales on the courthouse steps, and buying directly from the lenders once the property becomes REO.  If you are interested in pursuing such opportunities, either on your own or as part of a larger group, please let me know what you are looking for (location, price range, cash available, age and quality (A/B/C), notes vs. real estate, etc) and one of us will contact you to discuss your investment objectives and available properties.

Please check back here from time to time as we will be updating market data, news articles and available properties on a regular basis.