Is Multifamily dead …..
Multifamily is only dead for inexperienced operators who failed to take adequate safety measures by using unmanageable floating interest rates.
The Houston foreclosure of 3200 multifamily units has exposed the obstacles encountered by operators in this industry.
Some may see this as worrisome, but Viking Capital sees this as an opportunity to grow, optimize, and profit.
Variable debt was widely used in the last 24 months as the primary means of acquiring multifamily assets.
But the problem is
- There were not enough built-in reserves, owners can’t adapt quickly to the changing rate environment.
- They hadn’t learned to operate efficiently.
- Lastly, they were unable to implement their value add strategy within 6 months of acquisition; leading to the scenarios like the Houston foreclosure.
Here are three ways foreclosures will increase Viking profits:
- Viking will buy distressed properties at low costs, add value to the property, gain appreciation, then sell high.
- By creating efficiency in operations we are cost-effective and provide higher returns to investors.
- We will negotiate more favorable terms with lenders on distressed properties, reducing the cost of capital and improving profitability.
If you want to Turn Fear into Fortune During Economic Downturns join my webinar on April 26th at 8 PM ET