How to Approach Multifamily Investing During the Holiday SeasonDec 15, 2022
Today we have our final guest post by Kenneth Sumners as he shares his take on how to approach investing during the holiday season. As with all of our guest posts if you would like to connect with our writer please give us an email at [email protected]
The holiday season is a great time to ramp up your multifamily investing. Here are some of my favorite tips for how you can take advantage of some quirks during the holidays:
1. The number of people out looking for deals decreases as they head out for December vacations, take advantage of others slowing down.
Fewer people searching for deals gives you a better opportunity to find your next opportunity. Slower periods can be a great opportunity for investors in the multifamily market, as there will be less competition from other investors who are busy with their own holiday plans.
Now is the time to start looking for properties that may have been overlooked by other investors. There are still plenty of deals to be found, even during the holiday season. With less competition, you may be able to negotiate a better price on a property you are interested in.
In addition, remember that many sellers may be motivated to close a deal before the end of the year for a variety of reasons. This could create even more opportunities for savvy investors who are willing to act and close quickly.
So if you're serious about investing in multifamily properties, don't let the holiday season slow you down. There are still plenty of deals to be found if you know where to look.
2. People are more determined to close because they have a year-end deadline
The holidays can be hectic for many people, but it can also be an opportune time to close on a multifamily property. Many people are determined to close at the end of the year because they have a year-end deadline, which means they're likely to entertain offers they would have passed in previously.
To approach multifamily investing during the holiday season, start by reaching out to potential sellers early on. Many people are busy with family and travel plans during this time of year, so it's important to get in touch as soon as possible. You can also offer an incentive to sellers who are looking to close before the end of the year.
If you're able to successfully close on a property during the holiday season, you'll be in a great position to start planning out renovations early. You can lock in renovation work or at least start pre-planning with companies before they close up shop for holiday time off.
3. We are still in a great market for multifamily because it historically performs great in periods of high inflation/tough economic times
When it comes to multifamily investing, we are still in a period with opportunities in the market. This is because multifamily properties tend to still perform relatively well during periods of high inflation and tough economic times. Relative to other investments, multifamily properties return to relatively normal returns faster than other investment alternatives like the stock market.
Aside from their economic resilience, they are a relatively safe investment. People always need somewhere to live, no matter what the economy is like. Even if the economy takes a turn for the worse, your tenants are likely to stick around. When rates continue to climb class C/B properties can see an influx of tenants because homes become less affordable.
Multifamily properties can be easier to finance than other types of real estate investments. This is because lenders view them as less risky than single-family homes or commercial buildings. As such, you may be able to get more favorable loan terms when financing a multifamily property. Keep in mind that debt and financing are tools, be sure to understand how you are leveraging them to get the best deal possible but don’t get caught in a bad situation.
If you're thinking about investing in real estate this holiday season, I’m happy to help discuss some of our upcoming opportunities or questions you may have about how to approach the market.
Look forward to connecting with you.