Is Multifamily in a Bubble? (+ Other Q’s)

Summary: Have q’s about multifamily apartment investing? We’ve got you covered with all the answers to your questions, plus a lil’ primer on what to expect from us in 2022. 

 


 

2021 was an incredibly busy year for us (to say the least 😂) but in the very best kinds of ways! The year coming off of the start of the pandemic was FULL of strong new acquisitions, and we expanded into a new market with Atlanta, GA.

🤟🤟🤟

We’ve also spent quite a bit of time reflecting, as ya do, and realized that our track record has consisted of 🏢 1,000+ units, $110M+ in assets under management, and thousands of investors who have joined us in the Kitti Freedom Club.

*tears* 😂😂

We’ve seen tremendous growth and opportunity in the value-add that multifamily apartments have brought, and we love how recession resilient it is. Multifamily apartment investing also provides an excellent vehicle for wealth creation, it’s shielded from the rollercoaster of the stock market, and helps with wealth preservation. 🤩

So, if you’ve ever wondered about multifamily investing, espesh in times like these, and wondered if it was in a bubble, we’ve got you. In this blog, you’ll find:

Is Multifamily in a Bubble? | The Kitti Sisters

The truth about recession resilience amid pandemic

People have asked us a lot whether or not it’s time to invest in a pandemic or a recession, and we’ve got a little case study for you. See, this year,  the pandemic has continued and uncertainty has become the new norm. But, we have also seen the recession resilience we talk about hold strong, and assets in our portfolio have continued to produce cash flow and steadily grow, despite huge swings in the market.

Wondering why? Because people always, always require a place to live.  ✔️

While businesses don’t need as much physical space as they used to (hellloooo, online shopping 😆), people do need roofs over their heads. Multifamily has been proven to be the most resilient asset class during the pandemic, and we’ve continued to see tenants sign leases and lock themselves into their new apartments.

We can also talk about the eviction tsunami (or the lack of it, in our opinion). Now, don’t get us wrong… the eviction moratorium, while necessary, wasn’t great fun for the investors themselves. However, when the moratorium lifted, we didn’t see this big eviction tsunami people thought we’d see. 🥳 

While evictions have increased, Eviction Lab shows that evictions are actually around 40% lower than the historical average.

And they haven’t returned to pre-pandemic averages either. 🤷‍♀️

Plus, people love renting. In fact, tons and tons of millennials have made it clear that lifelong renting is likely what they’re heading towards — it’s a heck of a lot less of a financial impact, with a heck of a lot more flexibility. 

Wondering what all of this means?! That there is literally no sign of the multifamily apartment market slowing down‼️

According to the National Association of Realtors, “Apartment demand will likely remain robust and rent growth remain elevated in 2022, given the current rates of absorption, rising mortgage rates in 2022, and the lower level of construction activity relative to current demand.”

Essentially, we’re incredibly certain that the performance of multifamily apartment assets will remain strong. 

Boom. 💫

Soooo… what about this interest rate hike & inflation headwind?!

We’ve also seen lots of talk (and gotten lots of q’s) about two big things lately: inflation and interest rates hiking.

So, here’s the truth. Rising interest rates aren’t going to keep away investors AND they’re likely going to have v little impact on multifamily sales activity in itself.

And, when it comes to inflation, let’s chat: it’s never been more important to hedge against inflation. Why, you ask? Because inflation is part of life. And, when you can invest in assets like multifamily apartments, you can boost cash flow, rock it with tax benefits 🤟, and grow your wealth in a way that beats inflation.

Plus, inflation (and supply chain shortages of course) are real. There’s a lot of financial worry right now, and we get that — which is why we so recommend hedging against it.

Multifamily apartment investing = the best way to do it.

Let’s chat about our new focus on Class A and B multifamily

In the last year, we were able to also focus on Class B assets as well as Class A assets — which is key. This means that we’ve been able to invest in assets with a different tenant profile — AKA, ones where the median income is $60,000 and up.

Wondering what this means? More stability, fewer move-outs, and a higher ability for rent increases. 😗😗

Plus, these properties tend to have less maintenance and/or deferred maintenance, which can help us achieve more rent growth without doing major rehab.

What this leads to, ya ask? More money to our passive investors, of course.

(We’ll be chattin’ more about these Class B assets.)

Focus on high growth markets

We ❤️ love data and we love wealth (just bein’ honest 😂), which is why we’re putting a huge focus on combing through key data and trends so we can focus on areas with next-level job growth, population growth, and job diversity.

Plus, people are moving… so we gotta move too, you know?! 

Enter: migration patterns.  According to Multi-Housing News, Between March 2020 and December 2021, asking rents grew by 34.5 percent on the Southwest Florida Coast; 31.1 percent in Phoenix; 28.5 percent in Tampa; 28.2 percent in Las Vegas; 27.2 percent in Boise, Idaho; 25.0 percent in Asheville, N.C.; 22.9 percent in Atlanta; 21.4 percent in Orlando; 20.7 percent in Raleigh-Durham; and 20.6 percent in Charlotte.”

Hence why we’ll be focusing on areas like this. 🙂🙂

So, here’s what’s next for us in 2022…

At The Kitti Sisters, we’re proud to be a Sunbelt company, expanding across the ~Sunbelt~ itself in Arizona, Texas, and Georgia! We’ll keep creating great, synergetic, key partnerships with teams in these strong growth markets (duh 🤪🤪), and we’ll keep providing top-notch recession resilient investment opportunities.

Plus, here’s some exciting news! 🥳

We are so, so, so, so, so excited to further expand our diversification opportunities: now we have the Build-to-Rent (BTR) ground-up development of multifamily apartment complexes in the hottest market (shhhhh…… more to come later!) Whoop whoop! This is a new asset class that will maximize wealth to the next level and we can’t freakin’ wait. 

If you haven’t heard of build-to-rent (BTR), you’re not alone! It’s relatively new, and it’s been quietly gaining traction with the unique ability for investors to genuinely get in on the ground floor.

See, purchasing new A Class properties is hard. Helloooo, bidding wars.

Class A, BTR? Not so much. That annoying process can be totally bypassed in a lot of ways. Plus, BTR has very little to no deferred maintenance because pretty much all items are under factory warranty.

BTR is also super helpful as an investor because you’ll be participating in appreciation during the *whole* development (hello, tax benefits 🤗). From horizontal to vertical development to lease, you’ll be able to boost that cash flow!

And, if you want to make sure you keep hearing about the ground-up development (all the updates and the behind the scenes), and be the first to know when doors are opened to the BTR ground-up development investment opportunity, if you haven’t already, come join us in the Kitti Freedom Club!

That way we can keep you in the loop on all our upcoming opportunities and partner together to crush your 2022 goals so owning your own time, finance, and future is your reality. ⚡

 


GET ME ON THE KITTI FREEDOM CLUB

The Kitti Freedom Club

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Invest with the Kitti Sisters

Fortified with years of experience, fierce passive investors (we ALWAYS in our own deals), and selected high qualities investment opportunities to help build your long term wealth no matter what stage in life you're on. We will show you the ropes, help you build out a powerful, personalizes strategy, and give you masterful, financial freedom focused on living your lifestyle dreams.

We're Palmy ➕ Nancy Kitti 〰️ The Kitti Sisters

A sister duo team obsessed with all things financial freedom, passive income, and apartment investing + apartment syndication, who turned a $2,000 bank account into a nine-figure empire.  Now, we're sharing with you the behind-the-scenes secrets of our wealth building strategy.

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