Tag Archives: real estate investing

Real Estate Investing, Market Insights

Housing Constraints Are Driving Multifamily Demand

Posted on by Jaiden Andus
Housing Constraints Are Driving Multifamily Demand

For investors seeking stable cash flow and long-term value creation, multifamily real estate continues to stand out as one of the most resilient and strategically positioned asset classes. Against the backdrop of affordability challenges in the single-family market and an ongoing national housing shortage, multifamily properties are playing an increasingly critical role in meeting U.S. housing demand.

Single-Family Challenges Drive Multifamily Growth

Homeownership remains aspirational, but affordability continues to be the central barrier. While mortgage rates have recently eased to 6.58% on a 30-year fixed loan, elevated borrowing costs have kept many middle-income households on the sidelines. 

The result: single-family home sales declined 2.7% in June, according to the National Association of Realtors, even as inventories reached 20-year highs, while the median new home price fell 6.2%, reflecting ongoing softness in the market.

For those allocating capital: when purchasing a home is out of reach, households rent instead. Multifamily real estate stands ready to absorb this demand and provide dependable returns.

This highlights how multifamily demand is becoming a central driver of investment performance in today’s housing market.

Growing Demand Supports Multifamily Performance

The multifamily sector has responded with strength. In Q2 2025, net absorption rose 47% year-over-year, marking the highest second-quarter performance in over three decades. Vacancy declined to 4.1%, well below long-term averages, despite elevated levels of new construction. Effective rents are rising again, with June registering the fastest annual increase since mid-2023.

These dynamics reflect both cyclical and structural tailwinds. Cyclically, multifamily benefits as single-family affordability declines. Structurally, the U.S. remains short an estimated 2 million homes, with unmet demand concentrated in growth markets across the Sun Belt, Southwest, and Midwest.

Navigating Today’s Market Environment

While demand is strong, today’s investment environment requires selectivity. Elevated construction pipelines in certain metros are likely to put short-term pressure on vacancy rates and temper rent growth. Forecasts for 2025 call for national rent growth of 2.2%, slightly below the historical average, as supply continues to be absorbed.

On the capital markets side, transaction volume is expected to rebound moderately in 2025, reaching $370–$380 billion. This is being driven by loan maturities requiring refinancing, sidelined capital reentering the market, and increasing price stability. For investors, this creates a window to acquire quality assets in strong locations at more attractive entry points than were available just two years ago.

Strategic Takeaways

  1. Prioritize Fundamentals Over Headlines: Focus on metros with strong job growth, diversified economies, and limited new supply. These markets are best positioned to deliver durable returns. 
  2. Be Selective on Timing: Elevated supply is a short-term factor. Investors with a medium- to long-term horizon stand to benefit as new construction moderates in 2026 and beyond. 
  3. Evaluate Risk-Adjusted Returns: With spreads narrowing, look closely at sponsor experience, leverage levels, and deal structures. In this environment, execution matters more than ever.

For high-net-worth investors balancing wealth preservation with growth, multifamily real estate continues to present a compelling opportunity. The sector’s resilience amid economic uncertainty, coupled with structural housing shortages and demographic demand, positions it as a core component of a diversified investment strategy.

As affordability challenges persist in the single-family sector, multifamily is not just filling the gap—it is shaping the future of U.S. housing. For investors, that means a chance to position capital where long-term demand is both clear and durable.

When You’re Ready… Here’s 3 Ways We Can Help:

  1. Connect With Our Team: Whether you’re exploring passive real estate for the first time or you’re a seasoned investor looking for a trusted partner, our team is available to answer your questions. Schedule a confidential strategy call to learn more about our investment philosophy, current opportunities, and how we help investors achieve income, growth, and tax efficiency. 
  2. Join Our Private Investor Portal: Gain exclusive access to our current offerings and ongoing pipeline of multifamily investments. Inside, you’ll find detailed financials, market insights, and structured deal overviews—all designed to help you make informed, confident decisions about where to place your capital. 
  3. Review Our Investment Strategy: Get a clear understanding of how we source, underwrite, and manage multifamily assets. Our strategy is built around long-term wealth creation, consistent passive income, and disciplined risk management. Learn what sets us apart and why sophisticated investors choose to partner with us.
Real Estate Investing

Why Market Cycles Matter and What They Signal for Multifamily Investors

Posted on by Jaiden Andus
Multifamily Market Cycles

Most investors know markets don’t move in straight lines. Real estate, in particular, runs in cycles, rising, peaking, correcting, and recovering in a rhythm that can swing prices by 30% or more over the course of a decade. For multifamily investors, staying attuned to multifamily market cycles is critical. It shapes not just when we buy or sell, but also how we position capital to maximize returns and manage risk.

The Four Phases of the Real Estate Cycle

Like the broader economy, real estate tends to repeat four phases:

  1. Recovery – The market begins to heal after a downturn. Vacancies start to tighten, rents stabilize, and confidence creeps back.

  2. Expansion – Growth kicks in. Rents rise, demand is strong, and new development ramps up. This is often the most optimistic—and competitive—phase.

  3. Hypersupply – Builders overshoot, supply outpaces demand, and vacancies creep higher. Rent growth slows or stalls.

  4. Recession – Excess supply and weaker demand push values and rents lower. Distress emerges, but so do some of the best long-term opportunities.

Each phase offers opportunities, but the right strategy depends on where the market stands.

Where We Are in 2025

Looking across today’s market, we’re somewhere between late correction and early recovery. The rapid interest rate hikes of the past two years slowed home sales and pressured multifamily rent growth in several high-growth metros. In some Sun Belt markets, year-over-year rents have even dipped. Meanwhile, tighter credit conditions and maturing loans are creating stress for owners who bought at peak valuations.

At the same time, supply pipelines are starting to thin, demographic demand remains strong, and inflation is easing. History suggests these are the ingredients that set the stage for the next recovery.

What the Past Teaches Us

If we look back over the last 25 years, the pattern is familiar:

  • Early 2000s Expansion: Strong growth, easy credit, and overbuilding.

  • 2007–2011 Downturn: Prices corrected sharply, creating once-in-a-generation buying opportunities.

  • 2012–2019 Expansion: One of the longest growth cycles in history, with multifamily at the forefront.

  • 2020–2022 Surge: Pandemic-driven demand and low rates fueled record rent growth and appreciation.

  • 2023–2025 Reset: Higher borrowing costs and affordability challenges are forcing a reset in pricing.

Cycles repeat. The investors who consistently outperform are those who act when uncertainty is high, rather than waiting for headlines to turn positive.

Preparing for the Next Phase

If we are indeed moving into early recovery, this is the time to sharpen pencils and prepare for opportunities:

  • Keep liquidity ready – Distressed and recapitalization deals are already emerging as loans mature.

  • Focus on strong markets – Job growth, population inflows, and supply-constrained areas will rebound fastest.

  • Lean into value-add – Repositioning well-located assets during recovery often delivers outsized returns.

  • Watch rates closely – As the Fed eases, lower borrowing costs could accelerate the next expansion.

Final Thoughts

Real estate is cyclical by nature. Prices rise, correct, and recover. It’s a pattern we’ve seen repeatedly. What matters is how we respond.

Today’s environment is uncertain, but uncertainty is often the prelude to opportunity. For multifamily investors with patience, discipline, and capital at the ready, the next cycle could prove especially rewarding.

Now is the time to prepare, so that when the market begins its next leg up, you’re positioned to take advantage.

When You’re Ready… Here’s 3 Ways We Can Help:

  1. Connect With Our Team: Whether you’re exploring passive real estate for the first time or you’re a seasoned investor looking for a trusted partner, our team is available to answer your questions. Schedule a confidential strategy call to learn more about our investment philosophy, current opportunities, and how we help investors achieve income, growth, and tax efficiency.

  2. Join Our Private Investor Portal: Gain exclusive access to our current offerings and ongoing pipeline of multifamily investments. Inside, you’ll find detailed financials, market insights, and structured deal overviews—all designed to help you make informed, confident decisions about where to place your capital.

  3. Review Our Investment Strategy: Get a clear understanding of how we source, underwrite, and manage multifamily assets. Our strategy is built around long-term wealth creation, consistent passive income, and disciplined risk management. Learn what sets us apart and why sophisticated investors choose to partner with us.

 

Tax Benefits

How the ‘Big Beautiful Bill’ Creates Bigger Returns for Real Estate Investors

Posted on by Jaiden Andus
Multifamily Real Estate

Multifamily Real Estate

Occasionally, legislation quietly reshapes how wealth is built—and most people miss it. The recent passage of the One Big Beautiful Bill Act (OBBBA) is one of those rare moments. While much of the public conversation focuses on politics, investors should pay attention to what really matters: taxes.

Taxes are often the largest lifetime expense you’ll face, exceeding housing, education, or healthcare. That’s why understanding and leveraging favorable tax policies isn’t optional; it’s essential to creating lasting wealth.

This new bill creates one of the most advantageous tax environments in years, especially for real estate investors. Whether you’re already invested in multifamily syndications or exploring new opportunities, these changes can help you keep more of your earnings, lower your tax burden, and accelerate your path to financial freedom.

When approached strategically, tax efficiency isn’t just an added bonus—it’s a fundamental driver of wealth growth.

Here’s what’s changed and why it matters for your investment strategy:

Lower Tax Rates Are Now Permanent

The 2017 Tax Cuts and Jobs Act (TCJA) introduced reduced tax brackets for individuals, but those reductions were originally set to expire in 2025. Under the new legislation, these rates have now been made permanent.

The key brackets include:

  • 24%, which is where many investors’ passive income lands.
  • 37% as the top rate (instead of reverting to nearly 40%).

Additionally, the standard deduction remains $15,750 for individuals and $31,500 for joint filers, with ongoing inflation adjustments.

What this means for you: The income you receive from K-1s and other passive sources will continue to be taxed at favorable rates, ensuring your after-tax income remains strong and predictable over time. This is a structural win that provides clarity for long-term planning and confidence in the net cash flow you can expect from your investments.

Bonus Depreciation Fully Restored and Made Permanent

Perhaps the most significant change in the bill for real estate investors is the return, and permanence, of 100% bonus depreciation for qualifying commercial real estate assets placed in service after January 19, 2025.

What qualifies?

Systems like HVAC, elevators, tenant improvements, landscaping, and other capital-intensive components. These can now be fully expensed in the year of acquisition, rather than depreciated over 15 to 39 years.

For passive investors: This translates into large paper losses on your K-1s. While these losses don’t impact cash flow, they are extremely valuable in reducing taxable income, either from the same investment or from other passive income sources.

20% Deduction on Rental Income Becomes Permanent

The Qualified Business Income (QBI) deduction, commonly referred to as the 20% pass-through deduction, has now been made permanent under the new legislation. 

Why this matters: For passive investors who are focused on optimizing after-tax yield, this becomes a built-in efficiency that doesn’t require restructuring or complicated strategies. It’s automatic, and it’s permanent.

1031 Exchanges Remain Intact

Despite prior discussions in Congress about eliminating or limiting 1031 exchanges, this bill has left them fully intact.

Investors can continue to sell investment properties and reinvest the proceeds into qualifying properties while deferring capital gains taxes.

Increased SALT Deduction for High-Tax-State Residents

Previously, state and local tax (SALT) deductions were capped at $10,000, which disproportionately impacted investors in high-tax states. OBBBA raises this cap to $40,000 for households with adjusted gross incomes under $500,000.

Capital Gains Tax Rates Remain Favorable

The favorable rates for long-term capital gains, typically 15% or 20% depending on income, remain in place.

Investor takeaway: When you realize gains from the sale of a property after holding it for a year or more, those profits will continue to be taxed at significantly lower rates than ordinary income. 

Real Estate Professionals Maintain Their Full Advantage

If you or your spouse qualify as a Real Estate Professional under IRS rules, you can continue to use passive losses, particularly from bonus depreciation, to offset active income like W-2 wages. For high-income households, this can lead to significant tax deferral or immediate savings. 

Additional Incentives for Affordable Housing and Opportunity Zones

In an effort to support underserved communities and address housing shortages, the bill expands the Low-Income Housing Tax Credit (LIHTC) and enhances benefits tied to Opportunity Zone investments. If you’re considering projects that blend financial returns with social impact, these incentives can improve overall project economics and provide additional federal tax credits.

Faster Federal Permitting for New Developments

The bill also includes a provision to streamline environmental and regulatory approvals for new construction, particularly in multifamily and commercial real estate. This reduces project delays and administrative bottlenecks.

For passive investors: This could translate into faster project starts, shorter construction timelines, and quicker transitions to stabilized income-producing assets.

What You Can Do Today

Taken together, these provisions make long-term real estate investing more attractive, predictable, and rewarding. For investors looking to scale their portfolios without added active work, maximize after-tax returns, and balance capital preservation with income generation, this bill creates a strategic opportunity by aligning tax policy with investment strategy.

  1. Consult with your CPA: Review your tax strategy in light of these changes, especially around depreciation, QBI deductions, and real estate professional status.
  2. Evaluate your current portfolio: Consider how these updates impact your after-tax returns and your capital allocation plans.
  3. Position yourself for upcoming offerings: Properties placed into service in 2025 will qualify for new bonus depreciation rules, timing matters.

Final Thoughts

We’ve always believed that real estate is more than just a way to generate returns, it’s a way to build durable wealth, protect capital, and create time freedom.

This new legislation reinforces that belief. The path ahead is clearer, more tax-efficient, and more aligned with the long-term investor’s goals. And while most will overlook it, those who plan intentionally and invest accordingly will benefit the most.