The Interplay of Mortgage Rates and Rental Demand

Unveiling the Market's Secrets from Behind the Scenes

Author

Nuvo Capital
March 07, 2024

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"This past year should largely be considered the first “normal” year since the outset of the pandemic. Demand for full year 2023 came in at about 260,000 units, right in line with the 2017-2019 average. A dislocated single-family market clearly drove some of the growth in demand, as renters were substantially less likely to leave a rental to buy a home with mortgage rates hovering above 7% for most of the year.”

- Sam Tenenbaum, Head of Multifamily Insights at Cushman & Wakefield

Recent Multifamily Sales (Click to view details)

Recent Multifamily Loans (Click to view details)

Question: 

When implementing a distressed multifamily asset turnaround strategy, how do you identify and prioritize areas of improvement to enhance the property's value and performance?

Answer: 

Implementing a distressed multifamily asset turnaround strategy involves identifying and prioritizing areas for improvement. Conduct a thorough property inspection to pinpoint immediate maintenance needs and safety concerns. Analyze financial records to understand the property's historical performance and identify operational inefficiencies. Prioritize upgrades that have the potential to increase rental income and overall property value, such as common area improvements and energy-efficient enhancements. Engage with local market experts to understand neighborhood dynamics and potential for revitalization. This strategic approach ensures that the turnaround efforts address both immediate challenges and contribute to the property's long-term success.

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Forecasting the Future: Economics Major on Real Estate Investing and the US Economy

Brian Underdahl, a multifaceted expert in multifamily real estate and macroeconomic research, holds an MS in Applied Economics from FSU. As CEO at QRE Partners, he led key roles in acquiring and managing U.S. apartment buildings, aligning investments with market trends. Brian's data-centric approach, using tools like Rstudio and Python, has shaped transparent and evidence-based strategies. His influence extends beyond real estate, contributing significantly to industry thought leadership through data analysis and macroeconomic research.

Quiz of The Week

What is a "cash-on-cash return" in real estate investing?

a. A measure of how much cash a property generates annually

b. The ratio of cash invested to the property's total value

c. The percentage of rental income that covers operating expenses

ʎʅʅɐnuuɐ sǝʇɐɹǝuǝƃ ʎʇɹǝdoɹd ɐ ɥsɐɔ ɥɔnɯ ʍoɥ ⅎo ǝɹnsɐǝɯ ∀ .ɐ

Random Tip of the Week

🙏Practice Patience in Negotiations - During property acquisitions, negotiations are common. Stay patient and avoid rushing into deals. Negotiate strategically, considering both parties' interests, and be prepared to walk away if the terms don't align with your investment goals. A patient approach can lead to more favorable outcomes.

Current Rates (Weekly Update)

10-Year Treasury - 4.13% (⬇️.17%)

Fed Funds Rate - 5.33% (0%)

1-Month Term SOFR - 5.32% (0%)

About Nuvo Capital Partners

Nuvo Capital Partners is a niche market-focused multifamily investment platform operating in the Southeast. As a dedicated sponsor (General Partner), we specialize in institutional quality real estate investments within these regions. Our team comprises industry professionals with 25+ years of combined experience, ensuring expertise and market knowledge. We pride ourselves on offering a transparent investment process, providing our investors with access to high-quality real estate opportunities while upholding integrity throughout.

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