The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful.
There are various trends to observe in the multi-family real estate investment space right now, but focusing on the top 3 can really show you what direction the market is going in. The value add is the top trend, which requires investing in properties to increase the income the property can generate. After the value add is the ground-up method of building multi-family properties on acquired land and the legacy hold.
Richard Wilson: What are the top 3 trends in multi-family real estate investing right now that you’re seeing?
Brian Burke: The most popular by far is the value add multi-family investment strategy, this is where you take an underperforming property, you make physical improvements, you make management improvements, with the objective of increasing the income of the property. That’s probably the most popular multi-family investment strategy now. Second to that is ground-up development. Whenever prices of multi-families start to climb, development becomes a popular strategy – this is where you’re going to buy a piece of land, get it entitled, build a multi-family property, and there’s a couple different strategies there you can either hold it for the long-term or you can flip it and sell it to another investor. Another popular strategy is just the legacy hold, especially for large family offices that have legacy financial goals, you can acquire property and hold it for generations. Those are probably the top 3.