Our Successful Method
We’re an investment firm that relies on processes and data, taking an institutional approach to acquiring and managing assets. This approach guarantees that our deals deliver impressive returns while managing risks effectively for our investors.
Our
Successful
Method
We’re an investment firm that relies on processes and data, taking an institutional approach to acquiring and managing assets. This approach guarantees that our deals deliver impressive returns while managing risks effectively for our investors.
Our Strategy
Our
Strategy
Investment Criteria
Investment
Criteria
Target Investor Returns
- 5-7% Annualized Cash-on-Cash (CoC)
- 1.8-2.0x+ Equity Multiple (EM)
- 16-20%+ Average Annual Return (AAR)
- 13-16%+ Internal Rate of Return (IRR)
Focus on strong risk-adjusted returns factoring asset, location, and business plan. (based on a 5-year hold model)
- Class A / B / C Multifamily Housing
- Years Built: 1980-2020
- 80%+ Occupancy
- Minimum functional obsolescence with deferred maintenance that can be remediated
- Opportunities with proven value-add potential to force appreciation
Markets
- Texas, Georgia and Florida
- Primary MSA’s > 100K population
- Median HH Income (1-mile) > $40k
- Job / Pop Growth > 2% annually
- Workforce Housing Demand > Supply
- Class B- or better submarkets
- Near diverse job centers, acclaimed schools, retail and transportation nodes
Reasons To Invest
Reasons To Invest
CASH FLOW
Using passive investments in commercial multifamily real estate offers a reliable method to invest in real estate without managing properties yourself. With professional guidance, you can generate steady streams of tax-advantaged passive income. This income frees up your time from work, letting you focus on what matters most to you. A stable multifamily property can deliver consistent cash flow, typically in the high single digits annually, distributed to investors every quarter.
Forced Appreciation
Commercial properties are valued based on their income, unlike residential homes. We enhance property value by boosting its income. This involves making improvements inside and outside the property that benefit tenants. By offering extra amenities, we attract and keep high-quality tenants, allowing us to charge higher rent or run the property more efficiently. This increases the property’s value when we sell or refinance it. Alongside generating passive income while holding the property, these improvements can add an extra 20%-40% to returns when we sell the property.
Tax Benefits
Multifamily properties offer unique tax benefits that aren’t available with traditional investments like stocks or bonds. Firstly, we can deduct property depreciation to lower the tax on actual income. With recent tax changes, we can also benefit from cost segregation and bonus depreciation, allowing us to speed up certain depreciable parts of the property and further reduce taxes. Moreover, when we sell the property, we can use a 1031 exchange to postpone paying capital gains by reinvesting in a similar asset. Refinancing options also exist, offering another opportunity to boost returns while minimizing tax impacts.
Financing
Multifamily projects have various financing choices, such as loans from government-sponsored entities like Freddie Mac and Fannie Mae. These programs increase credit availability and cut costs for eligible multifamily projects. Typically, we can secure loans covering 75% to 80% of project costs, with 1-4 years of interest-only options, maximizing investor returns. Many of these financing options are also non-recourse, reducing risk for investors.
Demand
In today’s housing market, multifamily rental units are becoming more vital, offering essential housing options for those entering the rental market out of need rather than preference.
We anticipate a consistent demand for housing, regardless of economic fluctuations, as people will always require a place to live. According to Yardi, the national occupancy rate for stable multifamily properties stood at just over 96% at the end of 2021.
Community Impact
We don’t just safeguard, grow, and enhance our investors’ funds; we do so while enhancing the neighborhoods where our tenants reside. We invest in upgrading our properties, both inside and out, to offer a clean and secure living space. Catalyst Equity Partners, together with our investors, are making a difference in communities, one apartment at a time.