How would you invest $1M in Portland Multifamily?

Investment BasicsI often get asked my opinion on multifamily apartment investment scenarios …and the askers seem to expect there is a single correct answer.  Portland multifamily is clearly the belle of the ball for commercial real estate investments locally.  We’re highly regarded nationally as well. We’re even seeing a growing transition of equities from stocks to real estate.  But within multifamily investing there is a wide variety of approaches investors can take to align their acquisitions with their risk profile, timing, whether they want to focus more on cash flow or overall growth, etc.

Over the next few installments of the “The Multifamily Insider Report” I’ll take a look at different options and their benefits.  The common premise will be: “How would you invest a million dollars?  Some of the profiles will look at are:

How should “Jerry the plumber” invest?

Jerry is a 50 year old who owns a successful plumbing business.  In addition to his own home Jerry has 8 other single family residences that are rentals.  He currently manages and maintains all the properties himself.  They have significant equity in them.

How should “Barry the bond holder” invest?

Barry is a retired businessman who has well over a million in bonds that pay anywhere from 2-4% per year.  He’s conservative, (he’s into bonds after all!) but he’s also concerned about inflation.  Monthly cashflow is very important as that is a major source of income.

How should “Jacob, the mid-30’s dynamo” invest?

Jacob is young enough that he doesn’t even think about cashflow…his focus is on the big chunks of equity that come upon sale so he can exchange into a larger property.  His current goal is to own as many doors and expand his holdings as fast as possible, even if that means a shorter hold period.  He doesn’t see himself as a risktaker…he times markets and buys at the bottom, although he does use higher leverage than most apartment guys.

How should “Dylan the daytrader” invest?

Dylan is a highly successful daytrader who understands the stockmarket and has made a killing in it.  He’s concerned that the volatility index of the market is increasing and that the European (and local) debt problems may reduce values.  He wants to put $1 million into multifamily, but he doesn’t know the first thing about asset management of real estate.

While these names are obviously made up, the profiles are similar to actual savvy investors I’ve met.  Please check back to follow the series as we explore the challenges and possible solutions for each of these scenarios.  If you want to me to assist you in developing a custom solution crafted to your specific economic circumstances, contact me, Rick Bean, at: 503.577.1034 or rick@rosecitycre.com.

Other articles you may like:

 

The Importance of Due Diligence in Multifamily Profits – Phase II – Books and Records | Rose City Commercial Real Estate

Demystifying multifamily cap rates, NOI, and investing basics | Rose City Commercial Real Estate

Multifamily real estate investment basics – part 1 of a series | Rose City Commercial Real Estate

Attractive cap rates attract investors to multifamily properties in Portland | Rose City Commercial Real Estate

Prospects for multifamily sector improve greatly | Rose City Commercial Real Estate

 

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