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Why Commercial Real Estate?

Contemporary Building

  • The average tax benefit percentage on a multifamily asset can vary based on several factors, including location, property type, income level, and the specific tax strategies employed by the investor. However, some common tax benefits associated with multifamily investments include:

       * Depreciation on the value of the building

       * Mortgage interest deductions

       * Operating expense deductions

       * Cost segregation

  • Diversification in multifamily investments can be achieved in several ways, helping to mitigate risk and enhance overall portfolio stability.  Key strategies include:

       * Geographic diversification

       * Property type diversification

       * Size and scale diversification

       * Investment strategy diversification

  • Cash flow in multifamily real estate refers to the net income generated by a property after all operating expenses and debt service (mortgage payments) have been paid. It's a crucial metric for investors, as positive cash flow indicates that a property is financially viable and can support ongoing expenses and potential investments. Here are the key components and considerations related to cash flow in multifamily investments:

       * Rental income

       * Operating expenses

       * Debt service

    Cash Flow = Gross Rental Income − Operating Expenses − Debt Service

  • Capital appreciation in multifamily real estate refers to the increase in the property’s value over time. This can be a significant source of return for investors. Here are some key factors that contribute to capital appreciation in multifamily properties:

    1. Location: Properties in desirable areas where there is strong  job growth, good schools, and access to amenities

    2. Market Conditions: Economic factors such as supply and demand, interest rates, and local housing market trends 

    3. Property Improvements: Renovations and upgrades  

    4. Market Cycle Timing

  • Broad market demand in the context of multifamily real estate refers to the overall demand for rental housing across a wide range of demographics and geographic areas. Several factors influence this demand, including:

       * Population growth

       * Urbanization trends

       * Affodability

       *Job Growth

       * Lifestyle preferences

       * Proximity to area conveniences 

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