Multifamily Investing during Covid
Updated: Dec 6, 2020
"The only constant is change," is a phrase I hear when thinking about how this pandemic will impact the current and future state of our industry. Virtual tours, hand sanitizer, gloved & masked movers, rent and mortgage relief, as well a general feeling of uncertainty
weighs on our minds, hearts and wallets.
"Housing remains strong," is another phrase I hear when shopping at Home Depot, looking for our new family home, hunting for refinance loans, and searching for new investment opportunities. Strange as it may seem, people are continuing to invest in remodels, upgrading and downgrading apartment leases, and most appear to be paying the rent.
Our expectations for a massive delinquency in rent, eviction rate, and general exodus from financial responsibilities currently appear to be unfounded. Markets in the midwest and south are more insulated from the pandemic, have more diversified employers, and are generally lower cost of living than the coast. These metros are thriving in arts, food, sports, industry growth and a high quality of life. My family really enjoyed our mid-Covid escape to Kansas City to enjoy clean kids parks, fabulous restaurants, and walkable neighborhoods with bakeries, coffee shop and even a LegoLand!
2020 Multi-family Market reports such as Yardi, show metros like Kansas City, Indianapolis, and Phoenix are showing growth in rents year-over-year. The combination of all-time low interest rates, rising rent growth, and movement of populations to lower cost of living metros, creates opportunity for investors to deliver clean, safe and affordable housing, such as our Maple Flats opportunity. General trends appear to be shifts to smaller metros, a migration to the suburbs and multi-generational living arrangements. Those who are waiting for a market bottom, may be surprised to find multifamily housing to be consistently strong while the stock market moves.
I am choosing to take a weighted average investing approach; acquiring high yield stabilized assets rather than waiting for a downturn, with the goal of gaining scale and operational efficiency. I strongly encourage our partners and coaching clients to protect their liquidity (to protect yourself from unforeseen challenges) and continue to refinance into lower interest rates where possible. Reach out to us to discuss more on the topic and please share your thoughts.