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MARKET & TRENDS

MULTIFAMILY

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5 Trends Shaping Multifamily Investing Today THESE TRENDS POINT TO MULTIFAMILY AS A PRUDENT INVESTMENT—IN THE RIGHT MARKETS.

by Grant Cardone

nless you’ve been living under a rock, you know

can increase your payments needed to service the debts. And they can affect your cash flow. All of which, of course, affect your net operating income and, ultimately, your exit price. That’s the bad side of rising rates. The good side is that it will force some bad operators to liquidate, and you may be able to pick up some deals.

U

TREND #1: RISING FED FUNDS RATE

that real estate in 2022 and beyond looks very different from what it has during the past 10 years. Which begs the question: Is multifamily still a great investment? To help you answer that question, here are some trends you’ll want to keep a close eye on.

In the grand scheme of things, the federal funds rate is still incredibly low; therefore, lending rates are too. But, as the accompanying graph shows, they are on the rise. Rising rates can affect the size of the loan you might qualify for. They

Federal Funds Effective Rate

1.4

1.2

1.0

0.8

0.6

0.4

0.2

0.0

JUL 2020

SEPT 2020

NOV 2020

JAN 2021

MAR 2021

MAY 2021

JUL 2021

SEPT 2021

JUL 2020

NOV 2022

MAR 2022

MAY 2022

1960

1970

1980

1990

2000

2010

2020

https://fred.stlouisfed.org/series/FEDFUNDS

Shaded areas indicate U.S. recessions

Source: Board of Governors of the Federal Reserve System (US)

60 | think realty magazine :: september - october 2022

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