Do you know the most common mistake investors make when choosing a multifamily investment company? All too often they commit capital without doing enough research, and this can mean you end up choosing a firm that simply isn’t right for you and won’t deliver the returns you expect.
In the worst-case scenario, investors can even fall victim to scams and risk losing their entire real estate investment.
So, how can real estate investors know which companies to trust with their capital? In this article, we’ll reveal the five best multifamily investment companies on the market today. We’ll also cover the big mistakes you need to avoid when choosing a real estate sponsor, and some useful criteria you can use to select the best firm for you.
Looking for the right multifamily investment company? re-viv helps investors drive growth with actionable multifamily investment strategies. Get in touch now.
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Comparing The 5 Best Multifamily Investment Companies
| Company | re-viv | Six Peak Capital | Trion Properties | Turner Impact Capital | Riaz Capital |
| Best known for | Innovative and agile firm specialized in smaller co-living properties | Major player in the co-living sector with big expansion plans | A mature and respected firm focused on value-add acquisitions | One of America’s largest social impact investment firms | A successful mid-market firm specialized in affordable workforce housing. True thought leader in housing innovation |
| Key markets | San Francisco East Bay | Key US gateway cities like New York, Los Angeles and Chicago | Southern California, Oregon, Colorado, and the Southeast | Primary and secondary markets across the US | San Francisco Bay Area |
| Property types | Mid-market assets with 50-100 units in the $2-$25 million range | 50-150 unit co-living and traditional multifamily assets | Value-add acquisitions ranging from $2-$50 million | Multifamily properties with over 200 units | Typically 6-140 unit properties with a focus on micro-living projects |
Methodology
These five firms were selected using a diverse set of criteria which includes company track record measured by IRR values and other self-declared performance metrics, along with future trajectory and social impact.
To provide a comprehensive cross-section of the contemporary multifamily investment space, we’ve chosen to include large private equity investment firms as well as multifamily real estate companies who specialize in co-living properties or affordable workforce housing.
What is a multifamily investment company?
Multifamily investment companies specialize in sourcing and facilitating investment opportunities in the multifamily property market. They typically take care of every aspect of the transaction from establishing the deep relationships it takes to find good properties, to putting together the many team members need to execute the business plan while also having the knowledge of local market conditions to understanding broader
A multifamily property or multi-dwelling unit is any residential building that contains more than one housing unit. Multifamily properties can range from a simple duplex or two-unit building which houses two families to a large apartment complex with hundreds of units.
There’s a wide range of multifamily investment companies on the market. Some multifamily firms specialize in co-living properties and social impact housing, which aims to both provide affordable rental solutions and generate profit for investors while having a positive impact on local communities in various ways.
Sometimes that’s simply by serving an underserved section of the rental market, like workforce housing or affordable housing. In other cases, it might mean iterating labor force programs, donating to local community organizations and schools, addressing climate change, or tackling the inadequate supply of well-located, affordable housing. Others take a more diversified approach and include a multifamily fund or individual property deals as part of a broader offering.
What should you look for in a multifamily investment company?
The sheer number and variety of multifamily investment firms on the market can make it hard for investors to know who to trust with their capital.
Here are the key criteria and benefits of multifamily investments that real estate investors should consider when evaluating these types of companies:
- Track record: A great place to start is the company’s recent performance and future trajectory. Take a look at their most recent reports, case studies, and any testimonials they’re willing to share. It’s also worth digging for any recent press releases or news articles about the company. These can give you an idea of their future plans as well as reveal any potential issues like legal or financial problems that might be lurking behind the glossy marketing materials. For example, any disputes between property management and renters or poor occupancy rates should set alarm bells ringing.
- Transparency: Doing your homework on a company can also show how transparent they are with their investors. If the information they report in their investor reports or private channels doesn’t line up with what’s in the public domain, you’re right to be concerned. Reputable firms should keep their investors updated with accurate data and be transparent about their IRR (Internal Return Rate) and other key performance metrics.
- Senior management team: Remember to check out the senior staff of any firm you’re considering investing with. A strong background in real estate is a positive indicator, but executives from other sectors can also bring invaluable insights and fresh perspectives that can drive innovation and add value.
- Size: Size doesn’t always equal good performance with real estate investing. Very large private equity real estate firms may have impressive resources, higher cash flow, and thousands of properties in their portfolio, but that doesn’t mean they’ll always outperform smaller firms. On the contrary, smaller firms may be more agile and better able to respond quickly to both investment management issues and shifting trends in this asset class since they don’t have a big and restrictive corporate structure.
- Diversified or Specialised: Some large firms may offer multifamily units as just one part of a highly-diversified portfolio. Others may be specialized in one particular niche such as co-living properties or affordable workforce housing. Look for a real estate partner that aligns with your own personal preferences. Some investors may prefer a much larger company while others may value having a greater social impact as well as generating attractive returns. As we like to say, there’s a massive buffet out there; eat the foods you like and don’t be afraid to try something new from time to time.
5 Best Multifamily Investment Companies
When it comes to choosing the right multifamily investment company, there are a lot of options to choose from. Let’s run through five of the top multifamily investment companies which range from small and agile mid-market firms like re-viv to larger institutions like Six Peak Capital and Turner Impact Capital.
1. re-viv
- Best known for: Innovative and agile firm specialized in smaller co-living properties
re-viv’s innovative ethos and emphasis on mid-market assets in the $2-25 million range makes them a great choice for investors looking for an alternative to a big fund. They’re also pioneers in the co-living space, giving investors access to this fast-growing category driven by Millennial and Gen-Z demands for apartment communities with greater flexibility and affordable rents.
re-viv primarily focuses on 10-50 unit properties and has delivered an IRR of 25% over the lifetime of the company. The company specializes in multifamily properties in Oakland, Sacramento and recently opened up the sought-after Denver market. re-viv has distinct expertise in the Opportunity Zone space and has sourced Opp Zone deals in all of the listed markets. An Opportunity Zone can be very attractive for investors who are facing a large capital gain from the sale of stock, business or other types of capital gains.
Oakland has also continually ranked in the top 5% areas for rent growth since 2010, and multifamily properties here tend to give 3-6% higher cash-on-cash yields than more traditional Bay Area properties.
re-viv might not be the biggest firm on this list, but they more than make up for that with their specialist local knowledge and social impact philosophy.
Looking for the right multifamily investment company? re-viv helps investors drive growth with actionable multifamily investment strategies. Get in touch now.
2. Six Peak Capital
- Best known for: Major player in the co-living sector with big expansion plans
Founded in 2016, Six Peak Capital is a large and well-established firm with a great track record in the co-living and generic multifamily sector. Their portfolio has a particular focus on affordable housing in gateway cities in the US including New York City, Washington D.C., Boston, Denver, Seattle, Chicago, and Los Angeles.
Six Peak Capital is currently seeking to raise $1 billion to expand its co-living projects across other US gateway and secondary cities like Atlanta and San Diego. The firm has reportedly already lined up properties totaling over 6,000 units which would require an investment of $1.5 billion. Their co-living investments are facilitated by Common which currently manages some 30 properties in cities like New York, San Francisco, and Los Angeles.
According to the company, their innovative approach is projected to deliver returns 10-30% higher than more traditional multifamily investment deals. Their track record and aggressive expansion plans make Six Peak an attractive option for investors wanting a fresh new approach to co-living investing.
3. Trion Properties
- Best known for: A mature and well-respected firm focused on value-add acquisitions
Trion Properties is one of the older multifamily investment firms on this list, with a 15-year record of delivering great returns across the board in Southern California, Oregon, Colorado and the Southeast. Their vertically-integrated strategy and diversified portfolio have proved very successful, generating an IRR of 25% across 70 acquisitions worth $800 million.
Trion focuses on acquiring multifamily properties in need of moderate to extensive renovations. They describe their ideal properties as “blank canvases” which have largely been left untouched for a decade or more.
Their experienced team seeks to maximize returns by increasing net operating income (NOI) and adding value to each investment. By vertically integrating many of their processes, they’re better able to control costs and increase efficiency.
Another key part of Trion’s strategy is sourcing off-market deals or properties that aren’t publicly listed for sale. This helps them secure favorable entry prices and deliver even better value-add deals.
4. Turner Impact Capital
- Best known for: One of America’s largest social impact investment firms
Turner Impact Capital is one of the largest multifamily investment firms specialized in social impact investing. Currently on track to surpass $5 billion of investment potential, Turner’s senior management team has helped successfully pioneer a “profit with a purpose” philosophy on a large institutional scale.
As well as offering investments in affordable workforce housing via the Turner Multifamily Impact Funds (TMIF), Turner’s diversified portfolio also includes healthcare and educational facilities funds. Their multifamily investment deals tend to feature properties with over 200 units in primary and secondary markets right across the US ranging from Dallas, Phoenix, and Milwaukee to New York and Los Angeles.
Turner has been selected as one of the top 50 Impact Assets IA50 2021 Fund Managers for the fourth year running. It’s proof of their excellent track record and status as a big corporate player.
5. Riaz Capital
- Best known for: A successful mid-tier firm specialized in affordable workforce housing in the Bay Area
Unlike some of the other firms on this list who work across the US, Riaz Capital is a local investment company based in Oakland, California which focuses on the San Francisco Bay Area. Riaz’s principals have been operating in the Bay Area since 1977, giving them access to a wealth of insider knowledge on the local real estate market.
Riaz currently has around 1,500 multifamily units with their properties ranging widely in size from 6-140 units. They reportedly have another 1,700 units currently under development.
The firm recently opened up their third opportunity-zone fund that aims to create affordable and stylish micro-living solutions for middle-income Bay Area workers. Their Ozone Fund III has a target net IRR of 15%, although the firm has generated an overall IRR of 36% since it was founded in 2010. They’re looking to raise $100 million by the end of 2021.
At the core of the new fund is a micro-studio strategy, small units which offer high yields thanks to cost-effective construction and high demand. Riaz’s properties are aimed at mid-income renters in an area that has a 408,000 unit shortage of affordable housing.
Mistakes to avoid when looking for multifamily investment companies
Mistake 1: Not digging deep enough
Make sure to find out as much as you can about the company. This includes asking about their investment ethos, any future expansion plans, and the background and track record of their senior management team. Find out how prepared they are for worst-case scenarios by asking questions like “what happens if you struggle to retain tenants for a particular property?”
Mistake 2: Overlooking smaller or less experienced firms
Judging a firm on the square feet of property under management or their years of experience in the market can be shortsighted. Senior management teams may include seasoned executives from other sectors, such as successful investment bankers or tech founders, who can bring an invaluable wider perspective to the firm’s investment strategies.
Mistake 3: Not reviewing the firm’s PPMs
The private placement memorandum or PPM outlines all the details of the real estate deal. It is typically a very lengthy document, but it’s vital that you or your attorney review it so you are fully aware of all the terms and conditions before moving ahead with any firm. Thoroughly reviewing this document will help you decide if the types of investment opportunities offered by this firm align with your personal investment goals.
Choosing the Right Multifamily Investment Firm for You
Analyzing which multifamily investment opportunities and company are right for you can seem overwhelming. The best place to start is defining your criteria for the type of multifamily investment you want to make. The tips outlined in this article should help you select a firm that matches your investment goals and personal preferences.
For some investors, this might mean partnering with a large firm with diversification across many property types, while others may prefer to work with smaller, boutique companies that specialize in one particular category such as co-living spaces or student housing.
re-viv is one such company that focuses on smaller, mid-market properties, acquiring and developing housing in up-and-coming neighborhoods that are attractive to young professionals and working families.
re-viv’s pioneering approach delivers market-leading returns as well as positively impacting the local communities where we invest. re-viv can be a great alternative to larger funds for investors who are looking for a more personal service and access to the fast-growing co-living market.
Looking for the right multifamily investment company? re-viv helps investors drive growth with actionable multifamily investment strategies. Get in touch now
DISCLOSURE: The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
