As of the date this was posted, 7/3/2020, The MF industry has seemed to come to a sort of pause when looking at sales activity. Operators are waiting to see what happens over the next few weeks and months because there could be a big correction in pricing. Rents have not been impacted as much as expected. This is likely because people in a nice apartment want to stay there so they make paying rent a priority. It will be interesting to see what happens over the next few months.
Multi-Family asset prices have been driven up over the past 7-8 years because of demand. The Cap rates have become compressed and some people have chosen to stop buying completely over the past year or two. I talk to a lot of people and keep up to date with what industry leaders are saying trying to be as current as possible.
What does this mean? I think this is good news for the industry and there will likely be great buying opportunities in the next few months towards the end of the year and beginning of 2021. Some operators that had tight deals going into this pandemic will likely have to sell for various reasons. If rents are forced down a few percent then values will also be reduced back to a reasonable per door price. Syndicators who have capital to place, “dry powder”, will benefit from this shift when it happens.
The timing couldn’t be better to learn more about this asset class so I’ve started a MultiFamilyMasters.com Meetup franchise in the central PA area. This is a great resource and network for investors to learn from others. There are over 50 MFM chapters and it is growing because we all share resources. I’ll likely be doing the first one virtual so please signup to be alerted about updates.
A few people who have lots of experience in this business have already expressed interest in presenting at the meetings that I will be leading. It is free and will be a great resource to learn more about how you can passively invest in real estate. There is very little risk and investors realize higher than normal rates of return. You will be able to ask questions and learn about this asset class that many people have never heard about. I’ve explained various benefits in other posts on this website and invite you to read through them if you missed them the first time.
Here is the link, I’ll look forward to seeing you on the call. https://www.meetup.com/