Posted about 2 years ago

Could 2024 Be The Best Year For Multifamily?

Could 2024 be the start of one of the best buying seasons for multifamily real estate since 2012? Multifamily property values have dropped by over 20% from their peak, largely due to higher interest rates, but also due to the surge in new supply, which has put downward pressure on rent growth. However, there are a few signs that hint this may be the perfect time to consider strategic multifamily investment opportunities:

Fed: Inflation seems to be under control and slowly trending in the direction that will allow the Fed to decrease rates

Debt: Mortgage rates have fallen from 2023 highs, stabilizing between 6.6% and 7.2%

Supply: New multifamily starts and permits have slowed significantly, giving markets 18 to 24 months to absorb existing supply

Demand: Rent growth for multifamily is back in positive territory in most markets as new supply gets absorbed

An example of a strategic opportunity is this 296-unit Class B community located in Houston, TX.

This property is not only located in a strong and growing market, it's being picked up at pre-COVID price.

Entry Basis: The property is being acquired directly from the lender for less than $80k per door, significantly lower than the $105k per door all-in price it traded for in 2022.

Location: Conveniently located off Hwy 290 in the Spring Branch North submarket of Houston, this property is minutes away from major employers, retail centers, and primary freeways.

CapEx: The current owners recently completed over $3M in renovations. After closing $750k will be invested to improve legacy units, exterior renovations, and landscaping.

If you'd like to learn more about this opportunity and the diversified Invested Equity Housing Fund I, click below to complete the short investor survey: