Multifamily is still strong. Our Advisors checked out some of the market research both nationally and in specific micro markets in the midwest.
Multifamily is still strong and is the best bang for your buck.
- With the current financial market placement of capital. You have access to cheaper capital, this allows the sponsor to obtain a property with a downpayment averaging 25-30%. Cheap acquisition of debt will allow your return on investment to become strong.
- With such a influx of a seller market in many areas of the country, this still doesn't spur a large amount of consumers to become buyers. This causes the existing homes (SFR) on marketing (listed) to lower their prices.
- Sellers Markets typically mean there is a large amount of excess inventory, which will eventually be a indicator that product has rose in value too quickly.
- Valuation, multifamily like most commercial real estate has the ability to gain value from both the area/class and its income. Not making you subject to the SFR area or prices.
- Mercy of first time home buyers, for whatever reason the zealous millennials and baby boomers simply don't have the desire of home ownership as others have in the past. There are many facets that play into this, but when it is all said and done, no desire, which leaves are larger part of inventory left in the market.
- Demographics, millennials are the largest living population and many desire to rent. And there we have it supply and demand my friend. Basic Economics. Collectively the baby boomers and millennials make up 150 Million people.
Link: Additional Research
Part of our research was done via US Census Bureau and Marcus Millichap.