New construction, land, private houses, various creative deals, why multi-family?
We meet investors who have already understood the importance of letting their money work for them ,
They want to generate passive income from investments, they have already chosen to enter real estate investments – and specifically in the US
At the same time, they don’t know what type of deal is right for them to enter or what strategy they should invest in.
Also keep in mind that many investors feel that they have no control over the transaction, because the entrepreneur is the operator and leverages the money.
It is important for them to put the money in a place where they have a feeling “that they really know what they are doing” and not follow the entrepreneur blindly.
So in this article we would be happy to explain in points why we chose a multi-family investment strategy
And why from our point of view (and from our many investment experiences in the past) this is a very smart investment strategy:
1. Preserving and increasing value over time – you have to understand that there is a huge demand
For multifamily properties, so their value is always preserved
and even climbs over time (even we who know almost every building and
His history – we still work hard to get you a fine property for the deal).
2. In Multi, the value of the building is directly affected by its operating profit –
A multifamily is a residential property like a private house, but when it is above
5 apartments it is considered a commercial property.
This means that the value of the asset is created from the profit it generates.
This is what will determine its price.
For example, if you buy a property that is not well managed, then its profit is not high
due to poor management. However, by more correct management, which will increase the profit –
The value of the building will also increase immediately. We have a non-speculative element here
and can be improved by the property manager.
3. Surviving and succeeding in crises – precisely in crises people drive
Moving from house to building, reducing expenses, etc.
In this light, a good building that is properly managed (even during a crisis) –
Attracts tenants. So that the value of the building will be preserved as well as its profitability.
In some cases, there may even be an increase in the value of the property.
4. Centralized operation – it is easier to manage 10 apartments in a building compared to 10 land houses.
In scattered houses, the area can be large, there can be conditions
And each house has a different character, etc., which can affect and make the management more complex.
5. The owner’s ability to increase the value of the building – in residential buildings it is possible to increase
the value of the building in various ways, such as: increasing the rent, increasing the occupancy percentage,
reducing expenses and more.
6. Diverse potential for profit from additional sources – additional ways we use
to generate profit from the building by adding various ‘sources of profit’, such as: warehouses, laundry rooms,
Parking lots, machines of all kinds and more.
In conclusion –
After hundreds of transactions that we have carried out in aggregate, both for single family, for multi as well as other creative transactions,
We can certainly say to those who ask us that multifamily buildings are a smarter investment that allows both a good return, both more convenient management and maximizing the profit from the property, and minimal risk for us as investors.
