There are many reasons why investors choose to invest in multifamily real estate including:
• Steady income: Multifamily properties typically generate a steady stream of income from rent payments, providing investors with a reliable source of cash flow.
• Potential for appreciation: Multifamily properties can appreciate in value over time, providing investors with the potential for capital gains.
• Economies of scale: Multifamily properties can benefit from economies of scale, which can help to reduce operating costs.
• Hedging against inflation: Multifamily properties can help to hedge against inflation, as rents can be raised to keep pace with rising prices.
• Potential Tax Benefits: Multifamily allows investors to proactively managing an investment’s tax liability through depreciation, cost segregation and deferring gains through 1031 exchanges to possibly magnify returns and allow profits to grow tax-free over time.
Multifamily real estate investment syndication is a process where multiple investors pool their funds together to collectively invest in large-scale multifamily properties. It allows investors to access larger, professionally managed properties that they might not be able to acquire individually.
Investment structures and timelines can vary, but most syndicated multifamily projects have a hold period of 5 to 7 years. Investors receive periodic distributions throughout the holding period, and the property eventually has a liquity event (sale, refinance), providing a potential capital gain.