đź’ˇ Summary: The internal rate of return (IRR) is a key metric that measures the expected return on an investment, accounting for the time value of money. While a higher IRR typically indicates a better investment, it doesn’t consider risk factors, so a higher IRR doesn’t always mean a better investment if the risk is … Read more
In our last blog, Evaluating the Sponsor, we mentioned that there will likely be syndicators who will be forced to leave the business. Unfortunately, it has started with the recent announcement of the $229MM multifamily foreclosure in Houston, TX, and there will likely be more to come. While details are still coming out, we believe … Read more
đź’ˇ Summary: In today’s volatile market, choosing the right multifamily sponsor is critical to mitigating risk and achieving long-term success. Investors should prioritize operators with proven track records, sufficient assets under management, and experience navigating past downturns like the 2008 financial crisis. Evaluate financial stability, communication practices, transparency, and team structure, and verify credibility through … Read more
đź’ˇ Summary: Over the next decade, persistent currency devaluation and oil-driven input costs are likely to lift asset prices, making hard assets a practical inflation hedge. Within real estate, necessity-based sectors—especially Class B & C multifamily—offer resilient, risk-adjusted returns amid discounted pricing from distressed sellers. For investors focused on multifamily investing, partnering with experienced operators … Read more
đź’ˇ Summary: Rising rates and recession risk mean investors should expect lower projected returns and longer holds in multifamily investing—think low-to-mid-teens IRR for Class B & C value-add deals. Prudent operators are de-risking with higher exit cap rates, modest rent growth, lower leverage, fixed agency debt, and larger reserves. Be wary of sponsors touting outsized … Read more
đź’ˇ Summary: Macro signals point to disinflation and a potential recession, and some multifamily operators are under pressure from higher debt costs. Break of Day Capital is selectively acquiring from motivated sellers using conservative underwriting to target superior risk-adjusted returns. For passive investors, multifamily syndications in growth markets remain a resilient, inflation-hedging approach when managed … Read more
đź’ˇ Summary: Choosing between single family and multifamily investing depends on your goals, capital, and desired involvement. Single family homes are easier to enter and sell but offer lower cash flow and higher vacancy risk. Multifamily properties provide stronger, more stable income and the ability to force appreciation through increased NOI, though they require more … Read more
