Multifamily Real Estate Investment: Demonstrating your “Because”
In multifamily real estate, you are your boss. You have the freedom to invest in your manner, preference, and strategy. But, this is not the proper thing to do. In every war, you have to be prepared. You have to know your goals and objectives in investing. In other words, you have to know your “why” and you have to demonstrate your “because”. You need to possess a mission and vision.
The Mission and vision should be in line with the freedom to invest in real estate as an individual when your means permit your capacity without any control. Having the freedom to have steady cash flow monthly is excellent simply because you can just be yourself. And you are living your life the way you wanted it to be. Having said this, when you can be still and have that freedom, you will have all the time to assess and earmark where you want to invest your money.
Going back, your particular “because” should be in coherence with your present state; it varies. So if you are thinking of engaging in real estate, and you are looking at transitioning from single-family to multifamily apartments, there will surely be leads that are designed to your liking that the real estate industry can bring to you.
But, you have to consider the lingering economic state brought about by the pandemic. There are several considerations before engaging in multifamily real estate investment. Like the present scenario brought about by COVID-19, you have to know the ins and outs of how to deal with these complex times. Listed below are shocking facts of the present state of the real estate investment industry and some solutions.
It is a known fact that the great recession started the depression. The 1930s, that was the time when rich people stimulated the economy for the nation to get afloat. Here are shocking truths:
- Right, the United States equity markets are trading below the average trade and are continuing to get lower at this point because of the emergence of the new variant; omicron. More than twenty (20) million will be unemployed as predicted by Goldman Sachs as of November 2021 and is still rising to this point.
- And since all these equities are drastically decreasing, multifamily investment is dropping as well because one way or the other they are linked. However, you might still see deals but at a very slow pace.
- On the other hand, unemployment is still not out of the woods, and the loss of jobs is increasing. We don’t know if there is still a stimulus package that can be given by the government. The people are continuing to incur economic injury.
- Covid-19 has made a serious impact and is continuously affecting the real investment industry. It is important to adapt to the “new normal” and look for a solution to alleviate and facilitate effective investment without face-to-face contact with clients, especially now that Omicron is spreading like wildfire. There are other tools that you can make use of such as video conferencing and social media. Since one cannot be able to go on a physical trip, a 3d virtual model is the most effective way to show the client of the prospect unit.
- Sales volume hits a tremendous decrease up to this point so expect a high volume of loan applications. People tend not to buy anything because of this pandemic and you see the effect on individuals and families. Their purchasing power is under question. There will surely be more loans that will manifest shortly. So a more competitive loan for each agency will manifest. Multifamily real estate loans will be a lot competitive these coming days and so a mission-driven deal will depend on the income level and rent for the location. Each client differs per requirement and preference.
Looking at the brighter side, you can aid in stimulating the economy. To date, the multifamily investment industry remains strong as compared to the healthcare and retail industries. The rentals remain to be competitive and a minimal increase of 1.1 to 2.4% in delinquency remains to be fair. But then again, this date might change in a short period.
Hence, crowdfunding can help enhance the economy. This may be the best time to look for different sources of capital. And your money, when pooled together with another individual can make a difference. It means that a bigger capital can be invested and can obtain bigger properties in real estate, particularly multifamily apartments.