How to Perform Momentum Plays on Multifamily Property Investing

When it comes to investing in multifamily properties, risk is always a big factor. For me, however, it’s a matter of going around these risks using momentum plays and achieving greater success as a result.

Multifamily investing has been a big part of my life recently. This is mostly due to the advantages apartment complexes have over single-family homes. The cash flow is consistent, and the returns are far greater. I have stayed in this sector on the strength of these advantages. I have held on long enough to close 26 syndication deals, and I want to see how many more multifamily investment properties I can acquire to scale my portfolio.

It’s easy to generate greater wealth through multifamily investing, but just like any other business model, the structure isn’t always perfect. Come to think of it, investors and syndicators are never truly free from risk. The multifamily market revolves around a certain set of dynamics that are at once volatile as they are complex.

Still, you can rise above the challenges of this sector by applying the right approaches. One such approach that has always worked for me is momentum plays.

What are momentum plays?

If you ask me, I’m the type of person who would concentrate on purchasing off-market properties. I would look for momentum plays were I watch out for the vacancy rate of a potential asset. Once I acquire a property, I make sure to increase the occupancy rate through renovation projects. Usually, I will look for properties with occupancy rates of at least 80% and see what I can do to increase their value.

To give you a more concrete example, take an asset I have acquired in Lake Jackson, TX. The property is called The Monaco Villas. My property managers and I set out to make it more attractive to tenants and open up new income streams that increase its NOI and optimize its cap rate. We were able to bring the occupancy rate to 90% and, more importantly (during major renovations the occupancy went down to 55%) scaled its value considerably. So, from $6.58 million, the property is now worth $11 million! Through momentum plays, I was able to raise the value by more or less $4 million. Now, can you imagine that?

Leveraging momentum plays

With momentum plays, you are focusing on creating and maintaining consistent cash flow. For this, it’s important to make sure you have a high occupancy rate. This is something you can always obtain by keeping the tenants happy and providing them with the amenities they want.

You can follow these steps for a good start:

1. Get the right property managers

Property management is crucial when you are performing momentum plays. This is because your property managers are directly involved in dealing with tenants (or “residents” as we at Moneil would like to call them). For this, you will need to find a property management company that can handle the job. In my case, we have our own Moneil Management Group that manages all our assets. I found that self-management through our Community Managers proves to be more efficient.

2. Invest in a lot of renovation

A great way to keep tenants happy is to make sure the property is kept in good condition. You will have to make a lot of repairs and correct any structural issue you can find. Regular inspections are important when you want to identify anything around the property that needs fixing. You will also need to address infestations by pests if there are any. Finally, you can always renovate the way the property looks by investing in new fixtures, adding new amenities, and just upgrade it so it looks newer and fresher!

3. Talk to your tenants

Momentum plays also involve talking to your tenants and letting them know that you are meeting their needs. One thing’s for sure, you can maintain a high occupancy rate when you actually talk to your tenants and listen to their needs. That way, you will know how to retain them. Plus, you can also implement Resident Referral Programs, which allow us to generate great referrals from our residents.

Want to know more about momentum plays? Ask questions in the comment section below so I can share with you my insights as well as nifty tricks on how to get started.