Why Multifamily?
Multi family is a counter-cyclical industry that does well, even in a bad economy.
We find properties in growth markets
Multifamily
Multi family is a counter-cyclical industry that does well, even in a bad economy. Unlike single-family homes, the demand for apartment units has reached record-levels. Buyers, who three years ago could secure a mortgage to buy their own house, are now challenged to qualify for home ownership loans.
Because the cost of new construction is high, only “A” class apartment construction that commands high rents is economically feasible. RR Capital Investment Group, LLC (MIG) is dedicated to identifying opportunities in strong growing markets to meet the ever-present demand for multifamily B and C class properties.
Why Multifamily?
- The apartment market, as an investment vehicle, offers investors greater returns with less risk than other investments.
- The apartment market is less reliant on business cycles for occupancy and will continue to benefit from demographic trends and population growth.
- Multi family ownership is more management intensive than some other asset types. This distinction ensures “value added” opportunities.
- Apartment demand is driven by an expanding and transitional population, and, at present, by record numbers of foreclosures.
Apartments are the back-up housing choice as?
- Young people move out of their parents’ homes
- Students graduate from college
- Immigrants come to the U.S.
- Workers staffing new factories move into nearby neighborhoods
- Financial challenges create the need for temporary and affordable housing
Why Invest In Apartments?
Why Invest?
Multifamily properties historically maintain a structurally lower vacancy rate than other product types and generally exhibit greater resiliency in holding their values during market downturns. Demand can still increase for apartments in economic downturns when homeowners turn to renting to preserve capital and renters cannot afford to buy. Lenders offer superior terms due to investor familiarity with this asset type, and there is a wider availability of financing options.
DO I NEED TO QUALIFY FOR A LOAN?
Multifamily properties historically maintain a structurally lower vacancy rate than other product types and generally exhibit greater resiliency in holding their values during market downturns. Demand can still increase for apartments in economic downturns when homeowners turn to renting to preserve capital and renters cannot afford to buy. Lenders offer superior terms due to investor familiarity with this asset type, and there is a wider availability of financing options.
Acquisition Criteria
The following criteria are used to identify undervalued multifamily properties for acquisition, value optimization, management and disposition.
MARKET SEGMENTS
- Age: The 18 to 34-year-old market segment comprises 22% of the U.S. population
- Income: Renters who earn $35,000 and less annually
- The retiring Baby Boomers are scaling down and are enjoying carefree multifamily community living.
PROPERTY CRITERIA
- Multifamily residential apartments
- Roofs with pitched construction
- Minimum Occupancy 80% with the exception of properties that require renovation, providing properties are well located and present value enhancement opportunities
TARGET VALUES
- Size and Price: 100+ units in the $5MM – $15MM range
- Returns: 15-20% Cash on Cash, minimum Debt Service Coverage ratio of 1.5
- Type: C- to B+ properties located in C- to A areas
- Location: Emerging market areas with indicators for strong near and long-term economic growth
Discover RR Capital Investment Group’s Portfolio
Multifamily properties historically maintain a structurally lower vacancy rate than other product types and generally exhibit greater resiliency in holding their values during market downturns. Demand can still increase for apartments in economic downturns when homeowners turn to renting to preserve capital and renters cannot afford to buy. Lenders offer superior terms due to investor familiarity with this asset type, and there is a wider availability of financing options.
MARKET SEGMENTS
- Age: The 18 to 34-year-old market segment comprises 22% of the U.S. population
- Income: Renters who earn $35,000 and less annually
- The retiring Baby Boomers are scaling down and are enjoying carefree multifamily community living.
PROPERTY CRITERIA
- Multifamily residential apartments
- Roofs with pitched construction
- Minimum Occupancy 80% with the exception of properties that require renovation, providing properties are well located and present value enhancement opportunities
TARGET VALUES
- Size and Price: 100+ units in the $5MM – $15MM range
- Returns: 15-20% Cash on Cash, minimum Debt Service Coverage ratio of 1.5
- Type: C- to B+ properties located in C- to A areas
- Location: Emerging market areas with indicators for strong near and long-term economic growth
Acquisition Criteria
The following criteria are used to identify undervalued multifamily properties for acquisition, value optimization, management and disposition.
