Investing in multifamily syndications is an excellent way to generate passive income and create generational wealth.
But even as passive investors, you need to know which markets offer the best chances of achieving your desired returns.
Picking a rising market is essential because investing in a flat or declining market will make it difficult for the operator to execute the business plan, add value to the property, and deliver distributions.
So, how do you identify the right markets to invest in and why?
2 Things to Look for in a Market
High Growth: Look for markets with increasing population, rising incomes, and climbing home values.
High Yield: Focus on markets where you can achieve high yields.
Several websites can help you research a market. Pay attention to these six indicators:
These indicators will help you pinpoint high-growth markets. When an investment opportunity comes your way, take a moment to investigate the market it’s in.
Examples of Strong Markets
We've seen the difference firsthand. We invested in Birmingham, a low-growth market. That deal was tough – rents couldn’t be raised, and there was a high rate of delinquency. Contrast that with Little Rock, which was growing but had a poor labor pool, making it difficult to manage effectively.
On the other hand, Huntsville has been a perfect example of a thriving market. About five years ago, we noticed significant growth. Everyone was moving to the Southeast for its low cost of living and high quality of life, driving up the population and allowing us to charge higher rents.
Find an Operator who Conducts Thorough Market Analysis
Reducing your risk in syndications starts with choosing the right operating partner. An experienced operator will select the right market and property, and manage it efficiently. It's important to understand market analysis on a surface level, but ultimately, finding the right operator is key.
It’s who, not how, and we’d love to be your trusted source.
We've been managing multifamily properties for years and currently oversee nearly 2000 units. With our extensive experience, we've carefully vetted and passed on many deals to protect our investors' money effectively.
Ready to take the next step towards financial freedom?
Schedule a call with us at nighthawkequity.com
Let’s discuss how you can start earning passive income through smart multifamily investments.
To your success,
