Is Multi-Family Investing Still Worth It in 2025?
Robert EllisBusiness Member
Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
Section 8 Launch52 Reviews
Is Multi-Family Investing Still Worth It in 2025?
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Brian BurkePro Member
Investor · Santa Rosa, CA · Member since 2012 · 2k+ posts · 7k+ votesIt depends on how you define multifamily investing. Small stuff, like duplexes, 4-plexes, even 20-unit type of stuff is still viable for wealth building over the long term if you can find long-term financing such as local bank debt, and you are in a decent rental market.
If you define it as large multifamily, such as 100-unit and up apartment complexes, it gets more complicated. This sector has been virtually un-investable for over three years, and remains so today. It pains me to say it because this has been my primary business for over two decades and no one likes to see their industry non-viable, but I just have to call balls and strikes. I sold 3/4 of my portfolio in 2021 and 2022 and my only wish is that I could have sold it all.
Maybe in a year or two I'll see the signs that point to a good re-entry point. Today is certainly better than any time in the last three years, but there is just no rush--bottoming will be a process, not an event.
8 Replies
- Rental Property Investor · Emmaus, PA · Member since 2021 · 152 posts · 85 votes1y
It's easy to find reasons not to invest...they have always been available, especially when you come off a period where the interest rates were down below 4%. That was an historical anomaly though, rates have more consistently been where they are now and there have been many successful real estate moguls over the years.
That being said, yes, multi-family is still a good strategy for long-term wealth building. In general, people will always need a place to call home. As for class of building, that is up to investor preference. Class A is usually the safest, but offers the lowest returns. Class B&C offer higher returns with higher risk, and the lower down you get the higher that risk rises, especially when the market takes a turn for the worst.
Lastly, cash flows should remain mostly steady despite operational costs. Generally, as costs go up, so do rents, and if certain operational costs spike, then you go to market and try to find better rates. It's not always easy, but vetting a good property management firm should help reduce your personal burden.
- 1yBrian BurkePro MemberInvestor · Santa Rosa, CA · Member since 2012 · 2k+ posts · 7k+ votes
It depends on how you define multifamily investing. Small stuff, like duplexes, 4-plexes, even 20-unit type of stuff is still viable for wealth building over the long term if you can find long-term financing such as local bank debt, and you are in a decent rental market.
If you define it as large multifamily, such as 100-unit and up apartment complexes, it gets more complicated. This sector has been virtually un-investable for over three years, and remains so today. It pains me to say it because this has been my primary business for over two decades and no one likes to see their industry non-viable, but I just have to call balls and strikes. I sold 3/4 of my portfolio in 2021 and 2022 and my only wish is that I could have sold it all.
Maybe in a year or two I'll see the signs that point to a good re-entry point. Today is certainly better than any time in the last three years, but there is just no rush--bottoming will be a process, not an event.
- Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes1y
Quote from @Brian Burke:
It depends on how you define multifamily investing. Small stuff, like duplexes, 4-plexes, even 20-unit type of stuff is still viable for wealth building over the long term if you can find long-term financing such as local bank debt, and you are in a decent rental market.
If you define it as large multifamily, such as 100-unit and up apartment complexes, it gets more complicated. This sector has been virtually un-investable for over three years, and remains so today. It pains me to say it because this has been my primary business for over two decades and no one likes to see their industry non-viable, but I just have to call balls and strikes. I sold 3/4 of my portfolio in 2021 and 2022 and my only wish is that I could have sold it all.
Maybe in a year or two I'll see the signs that point to a good re-entry point. Today is certainly better than any time in the last three years, but there is just no rush--bottoming will be a process, not an event.
great comments, where were you focused? You still see a lot developed but it is tougher. Were you in ground up development or existing? I agree I haven't been outside development or entitlement for a few years but I could imagine if it's existing it's been tougher.
Section 8 Launch52 Reviews - 1yBrian BurkePro MemberInvestor · Santa Rosa, CA · Member since 2012 · 2k+ posts · 7k+ votesSunbelt national, and existing only.
Quote from @Robert Ellis:
- Investor · Hendersonville, NC · Member since 2013 · 754 posts · 281 votes1yBri you know I respect you, but I think that larger firms have been taking down investments in all parts of the cycle. Their cash flow projections (and payments) are down from 5 years ago, but with 5.0% fixed institutional money for ten years (more or less) and vertical integration and great reputations in the industry and good renovation plans/capabilities, they have not been unwilling to pull the trigger on new acquisitions.
Quote from @Brian Burke:
It depends on how you define multifamily investing. Small stuff, like duplexes, 4-plexes, even 20-unit type of stuff is still viable for wealth building over the long term if you can find long-term financing such as local bank debt, and you are in a decent rental market.
If you define it as large multifamily, such as 100-unit and up apartment complexes, it gets more complicated. This sector has been virtually un-investable for over three years, and remains so today. It pains me to say it because this has been my primary business for over two decades and no one likes to see their industry non-viable, but I just have to call balls and strikes. I sold 3/4 of my portfolio in 2021 and 2022 and my only wish is that I could have sold it all.
Maybe in a year or two I'll see the signs that point to a good re-entry point. Today is certainly better than any time in the last three years, but there is just no rush--bottoming will be a process, not an event.
Now, this is either because they are fools and are addicted to getting their funds filled out with assets because like the proverbial shark they can't not keep moving forward. Or, they have the juice to pick up deals from distressed investors as NOI pressures caused values to drop 20%+. You know what they say, buy low/sell high. I appreciate your perspective, and I think it's wise to use prudent judgment and to play for time if the many deals you see from week to week are just not penciling based on Praxis' strategies and strengths.
So I suppose time will tell if my other sponsors were fools these past two years or were simply opportunistic and all-weather-investors.
- Rental Property Investor · Indianapolis, IN · Member since 2024 · 6 posts · 6 votes1y
Quote from @Robert Ellis:
Hey everyone! I’ve been diving deep into multi-family and apartment investing lately and wanted to get some thoughts from the community. With interest rates shifting and market conditions constantly evolving, do you think it’s still a solid strategy for long-term wealth building?
What have you seen working in today’s environment—are you focusing on Class A, B, or C properties? Also, how are you approaching property management and ensuring cash flow remains steady, especially with rising operational costs?
Personally, I’ve been leaning heavily into strategies that prioritize risk mitigation. In this environment, I think it's less about chasing the highest possible returns and more about consistency and durability. That means focusing on steady, fundamental driven market places that don’t typically boom, but more importantly, don’t bust either. Think strong job diversity, growing populations, and landlord-friendly legislation.
As for asset class, I've found that newer Class A properties in more affluent suburbs tend to be the least volatile. If they're under 10 years old, you're generally avoiding major CapEx headaches, which lets you focus more on optimizing operations. Things like reducing ancillary costs, tightening up expense ratios, and gradually bringing rents to market.
It’s also important to stay well capitalized. Having strong reserves in place can make all the difference. Not just for weathering unforeseen challenges, but also for maintaining consistent distributions regardless of short-term market swings. In a market like this, this helps maintain trust and long-term investor confidence.
That’s why I still see multifamily as a strong long-term play. Despite higher interest rates and tighter margins, demand for quality rental housing remains strong. Especially in markets with solid fundamentals. When approached conservatively and thoughtfully, multifamily continues to offer durable income, appreciation potential, and protection against inflation. - Investor · Hendersonville, NC · Member since 2013 · 754 posts · 281 votes1y
As to my two cents, I think it depends on a sponsor's strengths and characteristics and strategy. So for example, with one sponsor I like and trust, their fund started in I think 2021, and they use variable rate financing + rate caps to be nimble and able to sell an asset without a grossly high disposition fee. It's a strategy that works beautifully in a rising market. In a falling market, one can get stuck paying rate caps and never getting the chance to sell for a profit. However, in I think 2022 they sold an asset held for 12-18 months and the IRR was through the roof! But that party quickly ended and now it's akin to being out to sea with no wind.
So when you ask if I'm into MF in 2025, well I think certain sponsors have certain arrows in their quivers that allow them to take down assets even in this market--after all, with NOI down 20-25%, and therefore values, it's a good time to buy if you can. I have seen some sponsors do so, and time will tell if they were loaded for bear and are able to sell when the market improves, thus making it a success, or if like Brian Burke points out, it's wiser to keep the powder dry and wait for unambiguous signs that the market is on the way up--when more institutional capital enters the scene and pushes cap rates down, among other factors.
One thing I would point out though is that I believe the Trump Administation through its extreme ideology, incompetence, and foul intentions--and sometimes a noxious combination of all three--is what really causes me to hesitate even at a time that most would consider to be the bottom of the market. I say this because if the rule of law means nothing, and if the economy is endangered by the Emperor with no clothes, then recession and inflation or even stagflation are on the horizon--and in that case investing in MF in 2025 is folly.
So I am torn between trying to dollar cost average into new MF syndications now that a lot of the pie-in-the-sky type syndicators have either been caught standing when the music stops or--as in the case of one of my other sponsors--having iterally been sued for malfeasance. And, on the other hand, keep my powder dry and worry I'm missing a great opportunity to invest with NOIs are quite low and cap rates are not particularly compressed....
I have read Burke's book, but I would love a crystal ball.....
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