If you study the ways in which millionaires and billionaires make their fortunes, you’ll find that the top two paths are entrepreneurship (starting your own business) and real estate investing.

Real estate has long been the favored investment for so many.

“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” 

    Franklin D. Roosevelt
     32nd President of the United States

“Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined.”
     
-Andrew Carnegie, billionaire

Real estate is one of the three largest categories of investing (stocks, bonds, and real estate) and a proven pathway to wealth creation. Investing in multifamily real estate is particularly attractive.

What are the Benefits of Multifamily Real Estate Investments? 

The benefits of investing in multifamily real estate are plentiful and compelling. Here are just eight of these advantages:

  1. Lower risk / Lower volatility
  2. Recession resistant nature
  3. Solid returns and the creation of passive income
  4. Favorable demographics
  5. Availability and advantages of commercial lending
  6. Ability to scale
  7. Opportunity to invest fractionally
  8. Tax benefits


    Multifamily Real Estate Provides a ‘Safe’ Investment Opportunity.

All investments have risk, but they don’t all have the same risk. Some investments are riskier than others. So, the ideal investment would maximize returns while minimizing risks. Commercial multifamily real estate closely approximates that ideal scenario.

Multifamily Sectors Have Remained Strong During Economic Uncertainty.

This asset class is so stable that it has outperformed several asset classes in recessionary times. Even COVID-19 couldn’t do much to disrupt the stability of this asset class.

This shouldn’t surprise you as people need a roof over their heads in good times and bad. And that’s what investing in multifamily real estate is; it’s investing in the basic need of shelter.

Despite lockdowns, quarantines, travel bans, and mandates, it has only been able to effectuate a 1-3% drop in rent payments. In contrast, rent collection for retail real estate plunged to 58% and hotel (hospitality) experienced 40% declines in occupancy rates. COVID-19 has been a black swan event that crushed so many asset classes while barely touching multifamily.

And if you study past recessions, you’ll find that multifamily repeatedly is one of the most stable asset classes during recessions. It also bounces back quicker than most others when the recession is over.

More People are Renting Than Ever Before.

Multifamily investing is also attractive because of the supply and demand mismatch for both apartment buildings and single-family homes. Every age cohort is renting in higher numbers than they previously have. Not only are they renting more, but they are staying in those rentals longer than ever before. And it’s only getting worse. Single-family home prices have skyrocketed at a much faster pace than wages. And inflation coupled with a supply shortage is making it worse every day. More people are being priced out of owning their homes as we are well on our way to becoming a “renter nation”.

Fractional/Partial Owner Investments.

There are a lot of advantages that investing in multifamily real estate has over residential real estate. Going big typically means economies of scale, stable income, and professional property management. But buying multimillion-dollar properties means multimillion-dollar down payments. For that reason, most people are priced out of these investments. Historically, only institutional investors and the very wealthy were able to invest in multifamily real estate. But that thankfully changed over the last couple decades.

Fractional investing is when like-minded investors pool their money together to buy some of the biggest and best apartment buildings and commercial real estate properties. It has opened this investment class for direct ownership to accredited investors who would otherwise be priced out of the market. The vast majority of these individuals commit their money passively with a private real estate investment company.

Tax Benefits of Real Estate.

Investing in multifamily real estate comes with substantial tax benefits. The cornerstone of those is property depreciation. Depreciation is the paper loss the IRS allows you to claim annually even as your property is appreciating in value. That depreciation can be used against the income generated from the property to offset the taxes that would normally be due that year. And if one has excess depreciation in a given year, they can bank that paper loss and use it in future years.

The more you dive into the subject of tax benefits from real estate, the more you’ll understand just how beneficial real estate really is.

Working with the Professionals at Vincent Companies to build your wealth.

Every year, the analytics and advisory firm Gallup performs a survey looking to see what Americans feel is the best long-term investment. And year after year,real estate comes in as the number one choice.

People know that real estate is a proven pathway to wealth and yet many forgo this asset class. They believe that investing in multifamily real estate means becoming a landlord who manages tenants, toilets, and takes 2:00 a.m. phone calls. They feel they don’t have the time, energy, or expertise to invest successfully. But they don’t have to invest actively. Instead, they can ride shotgun as a passive fractional investor leveraging the experience and expertise of a professional private real estate investment company. Vincent Companies has positioned itself as an industry leader that accredited investors know and trust for investing in multifamily real estate.

For those who see merit in the economies of scale and stability that comes from larger properties, a more passive, hands-off approach that leverages the experience and expertise of professionals is likely more appealing. And that’s what we do. We help investors add profitable multifamily real estate investment to their portfolio without having to become a landlord.

Here is our order of priorities regarding an investment:

  1. Principal Safety – The security of your original investment is our primary focus.
  2. Stable Cash Returns – Our investments are structured to generate income.
  3. Increasing Cash Returns – Your income may increase over time.
  4. Growing Equity – Your equity can increase steadily over time.
  5. Opportunity to Accelerate – Your investments will have the ability to “stairstep up,” increasing Cash Yield and Equity Growth at liquidity events every few years.

    Our Goal is to Help Our Clients Reach Permanent Wealth.

    Investing in multifamily real estate is an important wealth-generating asset class. And our track record speaks for itself. If you’d like to learn more about our investments or join our community of investors, simply contact us. We stand ready to help.

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