There is one common mistake I see investors make when evaluating multifamily opportunities: They pick a deal like they’re picking a stock. Now, it may seem wise to make investment choices based on historic and projected returns. And with the stock market, you can compare returns between stocks to help you make a decision.
You might be asking – is it really possible for a passive investor in multifamily real estate to become financially free? The short answer is YES, but the amount of time and money it takes to live off the investment is different for every investor.
It wouldn’t be 100% truthful for us to say that every multifamily deal that we do works out. Or, that every single investor makes the exact amount of money that we hoped they would make. It’s just not true.
You’ve probably heard the terms market appreciation and forced appreciation. Both sound similar, but they are two totally distinct terms. Let’s dive in and discuss the difference between the two and the factors that affect them.