Why Mukhi Capital Specializes in Multi-Family Properties

Specializing in multi-family real estate allowed us to perfect our processes,reduce investor risk, and increase profits

A few key reasons we choose to target multi-family dwellings include:

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Strong Cash Flow

The rental payments obtained from apartment complexes produce steady income for investors, which adjusts annually for inflation. A multi-family unit will provide rotating lease expirations, with fixed financing and management costs, increasing cash flow each year. Rental rates typically exceed market inflation.

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Maximizes Appreciation

You can accelerate the appreciation of a multi-family property through value-added improvements and minimizing expenses. Real estate property value depends on the location, external market conditions, and improvements made in relation to similar apartments in a close geographic area. The right property, paired with the right upgrades, can add substantial appreciation to the investment.

In addition to appreciation through upgrades, real estate values trend upward in most market climates.

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Stability

Multi-family real estate has a track record of being a stable investment asset class.The property spreads the risk across multiple units, reducing the overall risk of the investment. Unlike commercial properties, which can remain unoccupied for years in a down economic cycle, residential rental property fairs well in both up and down markets. In a recession, high unemployment increases home foreclosure rates, and banks tighten lending standards, driving consumers to rental properties. Strong market conditions lead to upwardly mobile consumers taking jobs in new cities and moving to more expensive residences, which can include luxury apartments. Both markets create dependable income and reduce the risk on commercial multi-family investment properties.

Today’s real estate climate of low homeownership rates has increased the stability of multi-family investment properties.

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Economies of scale

A multi-family complex essentially allows you to buy individual real estate properties, in bulk. Instead of purchasing a 100 individual homes, through 100 transactions, you only have one transaction, one management contract, and one maintenance team. Savings come from the lower cost of financing, managing, and renovating the property.

Another important benefit is that property management is handled internally through the project, rather than by investors, making it a true source of passive income.

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Inflation

Multi-family properties can provide a hedge against inflation because rents increase as operating costs rise. Landlords tend to pass on higher costs to tenants, which can include tax hikes, higher operating costs, or needed renovations.

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Preferred Tax Treatment

Real estate investments allow depreciation to offset profits, reducing taxable income on investment gains. You also have the option of reinvesting gains at the time of the sale, creating a tax-deferred benefit on investment real estate transactions*.

(*We are not tax professionals and do not offer tax advice. Seek the recommendations of a tax advisor to address the specific tax implications of your investment gains.)
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