WHY REAL ESTATE?
Why Invest in Multifamily Real Estate?
Multi family is a counter-cyclical industry that does well, even in a bad economy. Unlike single- family homes, the demand for apartment units has reached record levels. Buyers, who three years ago could secure a mortgage to buy their own house, are now challenged to qualify for home ownership loans.
We target Class B and C multifamily properties which have a 'value-add' potential in strong emerging markets
Historical Stability: Over the past four decades multi-family investments have provided returns that exceed all other real estate property classes
Increasing Demand: Home ownership out of reach for many consumers. U.S. population growth to exceed 60 million over the next 25 years.
Tax Advantages: Depreciation Tax Laws allow annual depreciation to be written off as an expense item. NO Capital Gains Tax using 1031 Exchange. ~15% Tax Liability On Cash Flows
Cashflow: Multi-family rental apartments generate a monthly (positive) cash flow
Hedge Against Inflation: As inflation causes price levels to rise, the price of your real estate and the cost to duplicate the property will increase with inflation
Forced Appreciation: Unlike single family homes, appraised values of which depend upon comparable sales in the neighborhood, commercial multi-family properties are appraised based on the Net Operating Income (NOI) they generate. We increase the NOI by bringing efficiency to operations and reducing the expenses, thus increasing the appraised value of the asset
Multifamily properties historically maintain a structurally lower vacancy rate than other product types and generally exhibit greater resiliency in holding their values during market downturns. Demand can still increase for apartments in economic downturns when homeowners turn to renting to preserve capital and renters cannot afford to buy. Lenders offer superior terms due to investor familiarity with this asset type, and there is a wider availability of financing options. The relatively high turn-over of apartment units (vs. office buildings, commercial space and single family homes) allows us to continually improve the assets as tenants move, increasing rents and therefore increasing value.
DO I NEED TO QUALIFY FOR A LOAN?
Compounding Capital Group LLC and our General Partners qualify for the loan, so no guarantees are required of our investors. We use Limited Liability Corporations (LLCs) to structure our deals, so investors other assets are protected and investor liability is limited to the amount of theoir investment in each deal