Multifamily investment funds are often recommended by savvy wealth managers for the many benefits they award accredited investors seeking passive income. A multifamily investment fund is usually comprised of equity investment positions in several large multifamily apartments and/or apartment complexes. These properties can be in one city/area or in multiple states depending upon the real estate sponsor’s investment strategy. As buildings are purchased, they are often refinanced, rents are raised, and distributions begin to be paid out to investors. If the investment performs according to the business plan, the properties appreciate in value, and a typical internal rate of return (IRR) for a multifamily fund yields 11-13% annualized.
In the investment community, however, multifamily properties are defined as apartment complexes with multiple rental units. A multifamily investment fund, therefore, pools many complexes together into one fund then divvies up the equity among multiple investors. Multifamily investment funds tend to be among the best real estate investments available because investors get automatic diversification, similar to a mutual fund.
At Trion Properties, we seek out the best deals with the greatest value-add opportunities, be they new or old, in the city or in the suburbs. Depending upon the property’s age, condition, facilities, and the surrounding neighborhood, we provide a value-add renovation, adjust rents accordingly, manage the property, and begin to pay investor dividends within months. Then, as these properties are sold the initial investment and accrued profits are paid to investors.
Of course, every private equity firm or commercial real estate sponsor has its own variations on all of these. Some may have two or three properties or upwards of twenty plus. Some may concentrate solely on one metropolitan area, or opt for purchasing only in the suburbs.
We do tend to diversify our funds by including properties dispersed across a region. Our past investments have been historically in the West where we began, and are now adding properties in the Southeast. Regardless of the market, we do intense due diligence both during acquisition and tenant lease-up and Trion Properties can substantiate an average internal rate of return (IRR) of more than 25%.