The Multiple Reasons Why Multifamily Real Estate Financing Has Become Important

Real estate can surely be an alternative for all those who do not wish to withstand a stock market’s volatility. This sector is lucrative for those investors wishing to grow their capital rather than just passively investing their money into a product or a fund that someone else manages; and if there is a doubt, then google Zhang Xin and Donald Bren.


The multifamily real estate is among the financial assets that have gained prominence for investors (both the mid-sized and the small-sized ones). Let us go through a few factors as to why a multifamily real estate investment is becoming more and more popular today.


This product is found in a large portfolio of every other lender


Lenders are pretty eager to offer loans and other financial assistance when the asset is an apartment; this eagerness led to the expansion of the multifamily business once again. In 2016 and 2017, the lenders are expected to keep on pouring funds into apartment properties; this finding has come from the latest Multifamily/Commercial Real Estate Finance Forecast that is released by Mortgage Bankers Association (MBA). Jamie Woddwell of the MBA anticipated that this forecast will continue to strengthen and grow. This shift toward multifamily real estate has been quite noticeable. However, as per research reports and trade analysts, this year, the competition among the lenders will be less frenetic and the growth will be a bit more moderate when they are compared with the ones that happened in 2015. And since this financial product is available in every second lender’s offerings, any investor can lay hands on this one easily and quickly. That is, the fund availability for this asset is really very abundant throughout the U.S.


Foreign nationals continue to seek this product


Apart from the hospitality sector, the foreign nationals are pretty interested in investing in multifamily properties just because they are aware of the established business model. As per this business model, the foreign nationals will have to pay in cash for the first property (in which they are investing). Afterward, while they are investing in the second property, they can completely use the income that they have gained from their first investment. Presently, almost all the alien investors are seeking a foreign national mortgage in Florida and other parts of the U.S. so that they can consistently invest in apartment buildings; such pieces of real estate, found in an apartment building, are further converted into condominiums. Later on, these investors can sell the converted units to other foreign individuals who agree to leave these realty pieces within the rental pool.


First-time investors simply love this financial product


Multifamily properties have even become the most favorite real estate investments for first-time investors. Which is why, this particular financial product has even become popular among a range of lenders. (That is what is explained in the first point, ladies and gents.) First things first, this financial product has become all the more common in the real estate sector for investors who want to:


  • Make everything related to acquiring the financial product easier, simpler, and quicker
  • Expand their portfolio in less time


These assets are easily managed


A multifamily real estate investment is always easier to manage. For example, if an investor buys 12 single-family real estate properties that are spread across the U.S, then person will find it tougher to manage. Now, what if the investor has all the 12 units located under a single roof? If that happens, then it will be pure bliss for the person as property management will become easy. And if the investor is a foreign national investor, it will be best to hire a property management company that can handle tenant issues, rent collection, and other managerial duties.


So here the reasons that have made multifamily finance one of the finest assets to invest in the real estate sector.