State of the small multifamily (<5 units) Boise market. Finding off-market deals!
Matt Stevens, Co-Founder of Capital Group Co., presented on the state of the small multifamily (<5 units) Boise market. He also shared Capital Group Co.’s process for finding and targeting off-market deals for their investor clients.
Some key highlights from Matt’s presentation include:
- Current inventory of small multifamily properties is extremely low
- Demand for small multifamily properties in the Boise area is extremely high.
- Above two factors results in very compressed cap rates, with small, existing multifamily (not including new builds) Cap Rates averaging about 5.2%
- Average Days on Market (DOM) is <5 (excluding outliers whose owners are simply fishing for unrealistic prices)
- All cash offers are common in this space
- Matt also shared the three common phases of real estate investing from getting the first deal to slowly scaling a portfolio to diversifying investments and making more complex investing moves once investors hit the ‘tipping point’ of ~10 properties
- Discussed the importance of identifying your investment strategy, whether for cash flow or appreciation
- Presented data from the past 5 recessions showing that the recession of 2008 was anomalous in the degree it negatively impacted real estate prices. Most recessions the stock market and real estate are more un-coupled and in 3 of the past recessions, real estate actually gained value while the stock market declined
- Matt shared Capital Group Co.’s strategy for winning in today’s tough market by targeting off-market deals using direct mail, cold calling, and the critical importance of lead follow-up