Smart money is not investing in just one asset class, or one particular thing. Nevertheless, smart money is investing in multifamily real estate, because it’s one of the best ways to grow wealth over the long term.
So in this article, we want to share our overview of an article by Anthony M. Graziano, who is senior managing director for Integra Realty Resources.
In his article, titled Einstein’s lesson on real estate, Mr. Graziano talks about smart money investing in multifamily real estate, and how multifamily investments compound geometrically.
Consistent Growth is Better
Is it better to consistently earn 3% per year with no reversals, or earn 10% per year for three years and then lose 5% percent per year for the following three years?
Smart money would rather have 3% of consistent growth every year than uncertain volatility. As in the example above, a more volatile investment can result in a little more profit, but the risk is considerably greater.
In his article, Mr. Graziano uses this example while also describing the present state of multifamily investment property in Miami-Dade, and summarizing it from a historical view.
Einstein is on the Market’s Mind
Mr. Graziano describes investors in multifamily properties as having Einstein on their mind, while giving his analysis of the real estate market and multifamily investment properties.
Smart money is investing in multifamily properties, and Mr. Graziano looks for that to continue into 2017. Because, when real estate investors sense economic weakness, or when they allocate money to safer investments, they flock to multifamily assets.
Multifamily assets are considered safer than commercial properties, such as hotels and shopping malls, because when the economy slows people still have to live somewhere. They often cut discretionary items and recreation, but they still spend on housing.
Furthermore, as Mr. Graziano points out, today more people are living in urbanized areas, which means more people are living in multifamily properties.
Looking Forward into 2017
“My money is on Einstein and low-debt multifamily investments heading into 2017”, Graziano writes.
Multifamily investment properties that are not over-leveraged generally compound geometrically, which is the key to understanding how to invest like Einstein, as Mr. Graziano describes.
This principle applies to four and eight-unit complexes, just as it does to 300-unit complexes. The only difference is the initial amount of the investment, which compounds year over year.
To learn more about the benefits of multifamily investing, and for detailed analysis, we highly recommend Mr. Graziano’s article: Einstein’s lesson on real estate.
Graystone Investment Group
Graystone Investment Group is an experienced Investment Group, wholesaling single-family and multifamily investment properties in metro Tampa Bay.
Unlike other wholesaling groups, we find properties that we resell to investors at discount prices, while also connecting them with private financing. We also coordinate with rehab and management companies we’ve worked with for years, at no extra charge.