Stability
Track Record
Real Estate is less volitile than other forms of investments and has historically outperformeed the S&P 500.
Southern California’s housing shortage is a demand driver for multifamily and it has been able to outperform other asset classes during economic downturns.
Resilience
Investors prefer hard assets like Real Estate in times of uncertainty due its intrinsic value.
During the global financial crisis and COVID-19 pandemic, retail, and office space suffered the greatest losses while the multifamily sector weathered the turmoil.
Growth
Appreciation
Real Estate is an asset that continues to appreciate over time. Historically Southern California real estate increases in valule by 6.87% annually which puts it in the top 10% nationally for real estate appreciation.
Hedge Against Inflation
An inflation hedge typically involves investing in an asset expected to maintain or increase its value over a specified period of time. Multifamily Real Estate offeres a hedge against inflation as rent typically increse during an inflation period.
Add Value
Multifamily properties have the ability to be improved through extensive remodels, re-tenanting, and rent increases. By improving the property's NOI, investors are able to "force appreciation" or control the increase in value of a property.
Leverage
Leverage is simply using other people's money to make more money for you. In real estate, you pay 20% of your money to control 100% of a property. When you sell that property or generate monthly income on that property, you are making money against the full value of the investment and your returns are multiplied as a result. With interest rates at a historic low, investors can utilize the unprecedented cost of capital.
Tax Benefits
Depreciation
Multifamily properties can be depreciated over a 27.5-year period, even if the property technically appreciates in value. Depreciation can be used to offset a significant portion of the rental income collected each year, making this a highly attractive asset class for investors of all kinds.
Earn cash flow while minimizing taxable income.
Cost Segregation Vs. Standard Depreciation
Cash Flow
Passive Income
Passive cash flow is periodic disbursements without significant effort beyond your initial investment.
While real estate has traditionally been considered a passive investment strategy, owning rental properties generally requires considerable effort, including overseeing the purchase, performing inspections, finding tenants and property management.
