| Check out our new audio content! |
By Jeffrey Grant
The
financial news headlines are enough to cloud the mindset of any real estate investor
wondering if the space is still a viable one — ongoing bank failures and
interest rate hikes, recession fears, lingering supply chain issues and a stock
market that reflects both unease and uncertainty. What should you do?
If
you’re smart during this period, look for opportunities to grow your portfolio
rather than cashing it out or just sitting on the sidelines. So-called safe
havens might be right under your nose – if you do your homework first.
Well-informed
individual investors are looking to diversify their portfolios even during this
time of turbulence and trepidation. While some are buckling down or momentarily
bowing out, savvier investors are still pursuing a diverse mix of investments
to position themselves to do more than just weather the storm. One ally in the
battle can be private real estate investment offerings or alternative
investment syndicates (alts) for accredited investors working
with registered investment advisors (RIAs) or family offices. Private
multifamily housing investments in particular are worth a closer look.
Alts,
RIA, REIT and Multifamily Home Projects
Why
alts, RIAs and multifamily? Because according to new
research trending from AltExchange, nine in 10 advisors intend to increase alts
allocations over the next two years, and because other financial
advisors might not have access to for their clients
or may get wrong. The nice thing about these investments is that they are
non-correlated to the stock market. And they don’t come with the extra layers
of management and other fees frequently found in traditional REIT (real estate
investment trusts) or funds.
article continues after advertisement
In
many such REIT scenarios, they can be filled with basket-type portfolios – you
have to invest in office, shopping centers and other property mixes that you
might not be interested in, investment-wise. But select firms offering direct
real estate exposure can offer a sound alternative to a REIT by offering
investors the ability to decide which single projects to fund,
thereby lessening their exposure to broader
and more volatile product types. This is one advantage to working with an RIA
connected to a private firm like the one I represent — Roers Companies — where
we can offer direct investment in specific multifamily properties to accredited
investors through the advisors they know and trust.
Multifamily
housing demand remains high, and the housing crisis in major cities is
widespread. Single-family homes are becoming increasingly too expensive to buy
or build for the current and next generation of housing seekers. Single-family
home construction is generally slowing, and interest rates are pricing out many
potential homebuyers, which creates sustained demand for rental housing. So
multifamily investing can be an ideal hedge in the current environment — again
if you do your due diligence.
Check
These Boxes: Scoping, Transparency, Frequent Reporting and Fast Lease-Up Rates
Eleven
years ago, Roers Companies’ co-owners (and brothers) Kent and Brian Roers began
developing multifamily properties in the Midwest. Now, the business they
founded includes 10,000 apartment units and $2 billion in development across 14
states — proof, perhaps, that its one-stop business model is thriving. The
leaders and their team have weathered more than a few storms, and they readily
attribute tenacity during downturns and diversification as key to their
sustained growth and success. But don’t just take my word for it.
According
to Kurt Durrwachter,
founder and CEO of the 13-year-old Ledge
Wealth Management in Sartell, Minn., with nearly $400 million under management, Roers
Companies has successfully differentiated itself. He says, “Their one-stop
business model with development, construction and property management is very
attractive. And their regular reporting of construction and other information
offers the kind of detail we rarely see in this business. I think they’re
pretty unique, and they have a highly successful leadership team that has done
an impressive job of growing the company in just 11 years.”
Roers
Companies reached that milestone largely on the strength of “friends-and-family
investors” based primarily in Minnesota. That strategy helped them become
a top-three Twin Cities developer,
Minnesota Real Estate
Awards’ 2023 Developer
of the Year, and even rank among
the Top 25 Developers
of multifamily housing in the country, according to the National Multifamily
Housing Council.
article continues after advertisement
Now
their new initiative, working with RIAs and family offices, will allow Roers
Companies to expand into additional markets where multifamily housing is needed
and market fundamentals are solid. This next chapter in their story is also
helpful in understanding the current and future opportunities that exist for
anyone considering what the multifamily niche has to offer — even in a
downturn.
One
longtime Roers Companies investor notes how the company has done a superior job
of checking all the key boxes investors look for.
“They
have been very successful in just 10-11years’ time,” observes James Lee,
“because they’re doing projects and making site selections in cities with
projected job growth and housing shortages, especially in multifamily housing—
and their fast lease-up rates are twice as quick as the industry average!
“The
critical research, scoping and planning Roers Cos., does—plus the construction
and leasing updates and quarterly reporting to their investors that offer true
transparency — are often missing with larger investment firms. The returns,” he
adds, “can be significant.”
Jeffrey
Grant, Senior Managing Director, Capital Markets, leads the RIA initiative for
Roers Companies, whose development pipeline includes ground-breaks in North
Carolina, South Carolina and Tennessee in 2023.
Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411Expo.com or our Eventbrite landing page, CLICK HERE.
Publisher: Source link