Multi-Family - 4-plex - DC area

[Yasmeen Neal]

Hello BP family!  Looking to hear thoughts on the current state of the DC multi-family market in todays market.  It seems the growth has slowed.  There are 8 wards and most are distinct.  As a new investor it’s also challenging to ID what stage of growth for each of these districts.  Any input is appreciated to ID whether an area in DC is at its peak, mid, or beginning phase of development.  Thanks in advance!

[Russell Brazil]

Quote from @Bryan Mitchell:

Quote from @Russell Brazil:

Quote from @Bryan Mitchell:

@Yasmeen Neal, you can contact @Russell Brazil, but it’s not a great market for MF. 

Thanks for the tag Bryan.

Hey Yasmeen, development trends go much deeper than even the large wards...and even deeper than the neighborhoods. 1 part of a neighborhood can be dramatically different from the other end.

Multifamily though is actually a shrinking asset class. The number of them that exists continues to shrink as they get carved up into condos. Low supply leads to pretty much a continued upward price trend pretty much regardless of neighborhood.

There is a ton of nuance though in the the multifamily sector in DC. Rent control, who is exempt and when, what the rent is for market or section 8, financing guidelines are different whether its 2 or a 3/4 unit. Feel free to reach oit with any questions. 

Russell, I can’t remember his name but the British Expat who appeared on BP Podcast has carved a living out of the section 8 niche here in DC. He seems to be doing extremely well with some of the countries lowest turnover rates I’ve ever heard of. So maybe multi family in the DC area it’s not the best, but there may still also be a rental opportunities for invests like @Yasmeen Neal

 Joe Asamoah. He's one of my good friends. He utilizes a section 8 strategy with high end rentals to keep tenants for 10+ years. His strategy does involve large sums of up front capital that a begining investor doesn't typically have access to initially though. 

He is typically buying a property that needs a full rehab in a high end location at say $600-800k, dropping $200-225k into the renovation, then doing a cash out refinance and placing section 8 tenants into the property and collecting $5500-6000 a month in rent on the unit. 

He's got a great strategy, it just requires tons of capital since we are talking high priced properties and outlr renovation costs here are so high. Hes been in the game over 30 years, and his capital/equity has built up over that time.

But even utilizing a normal buy and hold strategy here, my vacancy rate has averaged 2% over the last 13 years. (That's buying in general high demand locations in our metro)