The merits of investing in multifamily real estate are undisputed. The long-term cash flow, appreciation, and tax benefits are invaluable to building and sustaining wealth.
Multifamily is also ideal for insulating against recessions and hedging against inflation.
However, the “L” word is the biggest mental hurdle for would-be multifamily investors. Few want to be a landlord. Aspiring investors have heard too many horror stories from past and present multifamily investors who are constantly dealing with midnight maintenance calls and other problems.
Being a landlord becomes the biggest roadblock for many potential investors, preventing them from leaping into an asset class with strong merits. Their instincts aren’t wrong.
Acquiring, operating, and managing multifamily properties isn’t a walk in the park. It takes specialized experience, skill, knowledge, and established infrastructure, personnel, and processes to pull it off successfully. Only those who possess the capital, time, fortitude, specialized knowledge, experience, and expertise should actively invest in multifamily.
There’s an alternative to active investing for those who shun the “L” word: Passive Investing.
For investors who want to enjoy the fruits of CRE without having to actively plant the seed, nurture and maintain the tree, there’s the passive option. The passive option allows investors to partner with managers who have all the prerequisites for successfully investing in multifamily.
Passive investments through a private real estate equity fund allow investors to partner with experts by contributing capital in return for a company’s share and, consequently, a percentage of the profits. Passive investing enables like-minded investors to pool together to buy high-quality assets they wouldn’t be able to acquire and operate independently.
Leveraging the expertise and knowledge of experienced professionals has many benefits:
- By relying on those with a track record of success, we stack the odds of success in our favor by eliminating risks we would be undertaking if we were doing this on our own.
- Passive investments offer the opportunity to spread capital across multiple assets, geographic locations, and even asset segments to diversify and hedge against economic downturns.
- Experienced sponsors typically have a specialized asset as well as market expertise. Having experience and boots on the ground in particular geographic markets afford these sponsors significant advantages for finding off-market values that translate to higher returns.
Many want to invest in apartment buildings. They’re ideal for generating multiple long-term streams of income and appreciation, essential for achieving financial freedom. Fortunately, there is a way to invest in multifamily without becoming a landlord.
Passive investments that allow you to leverage the expertise and track record of successful multifamily investors and operators are the key to achieving your financial dreams and achieving financial independence.
Kyle Jones is a co-founder and Key Principal of TruePoint Capital, LLC. Kyle is responsible for the company’s strategic planning, investment decisions, asset management, and overseeing all aspects of the company’s financial activities, operations, and investor relations.
Kyle obtained a Bachelor of Science degree from Texas State University – San Marcos, where he also played Division 1 Baseball.
