If you understand the value of investing in multifamily real estate- you are in a great position.
As a multifamily investor, there are many investment strategies you can pursue. Whether as a syndicator or passive investor, it is crucial to analyze all investment strategies to ensure it aligns with your risk tolerance and financial goals.
What is Value Add Real Estate?
Value-add investing is a real estate investment strategy that involves increasing the value of an asset through renovations, rebranding, or operational efficiencies. This can be achieved through hiring a capable management team to run the property. In multifamily real estate, value-add strategies are used by many investors to achieve solid returns.
Let’s understand this from the following case studies:
In the following video, James is at one of his properties in Austin, Texas where he bought a value-add deal. Initially, James started the property at 95% occupancy and just after 2 months the occupancy dropped to 65%, but after 6 to 7 months again it has 90% occupancy and is a positive cash-flowing deal right now.
You can buy core/yield deals if you don’t want to face dropping in occupancy, but you need to understand that while core/yield deals are less risky, they are also less rewarding. Value-add deals, on the other hand, have a higher risk, higher value, and higher rewards. Take a look at the videos below for deeper insights:
2-Part Multifamily Deep Value Add Turnaround Case Study
Multifamily Deep Value Add Turnaround Part 1
The following is a proud moment for my best-selling “Passive Investing in Commercial Real Estate Book”. A fan sent me his copy of my book to get my autograph, with prepaid postage! I am happy that I am able to truly change the lives of people with my book.
We can have millions of assets under management (or even billion!), but nothing beats being an author that can make an impact like that. The title “Author” creates a legacy to be proud of. Take a look: