37th Parallel insights, industry news, commercial multifamily real estate trends, and more.
We have just recently, as in the December 2023 Fed meeting, officially made it to the top of the fastest interest rate-raising cycle in the past 50 years. It was dramatic. Looking forward to 2024, per the Fed’s dot plot, we...
Bonus depreciation is a tax incentive that allows investors and businesses to immediately deduct a large percentage of the purchase price of qualified business property rather than spreading out those deductions over many years. This...
If you’re new to real estate investing or seeking to expand your knowledge, you might wonder, “What are the benefits of investing in real estate?” If you find yourself in this position, welcome to 37th Parallel...
Real estate vs. stocks: Which is better for you and your investment goals? When you invest, you want to achieve the results you expect. So, it is essential to understand the pros and cons of what you invest in and not just follow the crowd....
If you’re an investor, you’ve probably come across the terms cash-on-cash return, equity multiple, and return on investment. These metrics can be used to evaluate the performance of an investment....
When you invest in multifamily real estate, there are multiple ways to profit. One is the cash flow or real estate income generated from the property. This monthly income is created as rents come due and is distributed quarterly in our...
The most important metric to understand when evaluating income-producing real estate is Net Operating Income (NOI). NOI, along with the prevailing capitalization rate (cap rate) for your investment type, grade, and location, controls...
All across the nation, individuals have real estate holdings they own and manage themselves. Some succeed, some fail, and others tread water. What separates these people is experience and expertise. Those with it are far more...
There may be a million ways to invest your money, but there are a handful of bedrock investing principles that you shouldn’t ignore. One is diversification, and the other is asset allocation or portfolio construction....
If you plan on retiring one day, you should familiarize yourself with the concept of retirement real estate income. Income-producing real estate is a proven inflation hedge and should be a part of everyone’s retirement income plan....
European waterfall might evoke recollections of Langfoss, Stuibenfall, or Mardalsfossen. But that’s not what this article is about. ...
To understand real estate taxes, you need to understand ad valorem taxes. Ad valorem is Latin for “according to value.” And ad valorem taxes are a series of taxes levied based on the value of an item....
2022 was a terrible year economically. One of the few bright spots was the safe haven asset of multifamily real estate. But otherwise, inflation skyrocketed to a 40+ year high, gas prices hit record highs, the S&P 500 was down...
It’s that time of year again… taxes. But let’s make it more interesting and focus on tax reduction, and more specifically, real estate deductions. As a real estate professional, I have to know about this...
Believe it or not, real estate correlation is an important topic. You should pay attention to it if you want to understand diversification. We all know that diversification is good advice—it’s right up there with some of...
Everybody is looking for recession-proof investments. Why is this? Depending on who you talk to, we’re either already in a recession or soon to be in one. Either way, this is not our first recession, and it certainly won’t...
Mention long-distance real estate investing in your local investor’s club, and you’re likely to get some very strange looks. Keep it up, and it won’t be long before you’re branded as someone who likes to buck...
The fundamentals of real estate span across three broad categories, acquisitions, operations, and dispositions. When you own a property, manage that property, and ultimately sell it, you’ve gone full cycle....
Just as it’s prudent to have an annual health exam, routine maintenance on your cars, and periodic repairs on your home, it’s also critical to follow a financial wellness checklist regularly for your financial health. ...
Income investing is when one invests to generate recurring long-term income while preserving capital. As a strategy, income investors tend to be on the lower-risk side of the investment spectrum. Investors who covet this...
If you took a survey and asked multiple people what kind of investor they are, you’d likely get a wide range of answers. You might hear things like, “I buy mutual funds, stocks, bonds, real estate, private placements,...
Regarding equity and ownership in real estate, knowing how investors make money is essential. If you’ve followed our articles, you know real estate investors can make money in four ways....
In 2021, Bloomberg published an opinion piece by economist Karl Smith entitled “America Should Become a Nation of Renters.” It got my attention, as this discussion is more relevant today than ever....
Funds are standard investment vehicles in the United States and around the world. Mutual funds, money market funds, exchange-traded funds (ETF), and real estate investment funds are just a few....
So, you want to invest in real estate. Well, who can blame you? Real estate is a time-tested, proven path to wealth for new investors. So what’s stopping you? For many, it’s the question of how to invest in real estate....
I talk to people who are enthusiastic about passive real estate investing all the time. It’s almost like they took the red pill and now they know the unsettling truth that earned income is both a blessing and a curse....
Is the stock market rigged? Can the average investor get a fair shake on Wall Street? These are curious questions. In Las Vegas, the odds are always in favor of the casino. How many times have you won a carnival game? Powerful...
Learn how to get started in multifamily real estate and maximize the return on your investment in the complete guide to investing in multifamily real estate....
Financial leverage is the use of borrowed funds to increase potential returns. In the right hands, leverage can be an absolute wealth multiplier. However, it can also be a loss multiplier for those lacking expertise or investing in...
Investors love to talk about financial liquidity. And if you peruse the various online financial discussion boards, you’ll discover a theme. High liquidity is excellent, and low liquidity is terrible. But is this true? At...
There are a lot of reasons why investors should consider investing in the multifamily rental market. One of those reasons is the demand for rentals. In this article, I’m going to focus on who rents, why they rent, and the demand...
Learn which investments often lose money as well as investment trends over the years to ensure you're growing your wealth....
When T.J. Starker took on the IRS in the late 1970’s and won, he re-defined how investors could manage their portfolios and permanently changed the core strategies of commercial real estate investors. The resulting tax code...
Is it possible to profit from inflation? For most people, inflation means losing money. It’s not overt where someone comes and forcefully takes money from their wallet. It’s more insidious with the prices of goods and...
Are you looking for investments that hedge against inflation? If you’ve been paying attention to prices lately, then you probably are. Why? Because the purchasing power of the dollar is down as prices are way up. ...
In the financial investing world, asset allocation models are everywhere. There are income models, growth models, and balanced models. There are one-fund, two-fund, and three-fund models. Some people are aggressive with 100% of their...
Do you have a balanced portfolio? Do you periodically rebalance your asset allocation? How many financial horror stories are the result of being out of balance?...
The six key questions that most people ask when gathering information are who, why, when, where, what, and how. When it comes to people interested in investing in commercial real estate, most already know the answers to some of these...
The economic impacts of COVID-19 have resulted in a recession not seen since the Great Depression almost a century ago. We examine performance over the last 90 days....
Real estate asset management is particularly important to apartment owners. However, many people don’t even know what it is....
Over the last 40 years, there have been five recessions and multifamily investing has proven stable across each of them, outperforming other asset types....
The government provides tax incentives for a whole host of things they deem important. There are incentives for getting married......
Even some of the most seasoned apartment investors have never heard of bonus depreciation. Why would they?...
“Learn the history, definition, and confusion behind what makes someone an accredited investor.” So you want to invest in private placements? Welcome to the club! With more than a trillion dollars worth of investment...
If you’re an accredited investor interested in private placements, then you should get comfortable with and have an understanding of Regulation D of the securities code. Now if you’re like most people, brushing up on...
Real estate due diligence is essential, as every day in the United States commercial real estate changes hands. Brokerage firms handle the vast majority of these transactions. For a fee, these sales and marketing professionals create...
Whether you’re a seasoned apartment investor or just starting out, you really need to know about rental property depreciation. Clearly, the tax advantages inherent in real estate are substantial. And the cornerstone of those...
Unless you hit the lottery or you’re sitting on a massive hoard of cash, you’re going to need commercial multifamily financing to buy properties. As a private multifamily real estate acquisitions and asset management firm...
Are you looking for the best investments in a recession? Does that even matter when the economy is booming?...
How to be successful in real estate is a question that millions of would-be investors ponder. The U.S. real estate industry is worth trillions of dollars. And many would love to tap into its wealth building potential. But being a real...
Winston Churchill once described Russia as a riddle, wrapped in a mystery, inside an enigma. For some investors, the subject of real estate syndication is equally perplexing. While Churchill’s description of Russia remains...
More people are renting today than at any other time in the last 50 years, so now is a great time to own properties....
Most people in the United States fall into one of two categories; homeowner or renter. The more people who choose to rent, the more demand there is for apartments. That demand is vitally important to you if you’re investing in...
Why invest in real estate? As a multitrillion-dollar industry and the third-largest asset class in the United States, commercial real estate has always been a viable option for investors. However, over the last several years we have...
I wish I had learned about fractional investing earlier in life, but somewhere around third grade they did start teaching me fractions....
Professional commercial real estate investors consider apartments their businesses, and that the best way to optimize their business performance is through NOI (Net Operating Income) optimization. There are three principal avenues to...
Investors want to know if the new real estate tax laws will help or hurt them. In short, the Tax Cuts and Jobs Act of 2017 will be a boon to the industry. But to understand why we need context around the U.S. tax code before we get...
Some of our recent projects have used Green Loans from either Freddie Mac or Fannie Mae; an excellent way for apartment investors to enjoy favorable lending terms while making improvements that reduce energy and water usage. In...
Clearly, apartment investing appeals to you. Who could blame you? After all, commercial multifamily real estate has the best long-term Sharpe Ratio (risk-adjusted return) of any other major asset class. Simply put, investing in...
“I want tax-free investments and a tax-free retirement.” That is the response I hear over and over again when I speak with investors about what they want from their investments. In fact, questions about taxes and the...
Yield or income investing is a critical component of my investment plan. Real estate investors call it cash flow. We know that if we create enough stable passive income streams, we become financially free. With that said, growth is...
Say the words financial freedom and different things come to different people’s minds. For some, financial freedom is having a good job that pays them more money than they need to live on each month. With their excess, they can...
The laws surrounding the lease agreement, also known as the rental agreement, are what make up a state’s landlord tenant laws and pro-landlord states are those with laws favorable to landlords. In an ideal world oil would mix...
As multifamily real estate experts, we keep a close eye on housing, homeownership, whether or not houses are too expensive and rental demand for apartment buildings. This is important because there is a clear relationship between the...
Many people don’t realize that they can choose to actively or passively invest in real estate. For them, investing in real estate has become synonymous with one word – landlord. We’ve all heard the horror stories of...
LLCs are often used in real estate investing to eliminate personal liability for investors. Learn more about this and other benefits of using LLCs to invest in commercial real estate. The dictionary defines liability as, “the...
Correlation and diversification in the multifamily sector As a private commercial multifamily real estate acquisitions and asset management company, many investors turn to us for portfolio diversification because of our return model...
The long-term performance of commercial multifamily real estate makes it a compelling asset class for many investors. If I could sum up that performance in two words, it would be consistent performance. Consistency is valued in so many...
Unlike investing in the stock market, direct ownership of commercial multifamily real estate is a low volatility asset class. The dictionary defines volatility as the liability to change rapidly and unpredictably, especially for the...
Saying that direct ownership in high-quality commercial multifamily real estate has less risk than the stock market is like saying that broccoli is better for you than Twinkies or water is better for you than soda. It just...
The tax benefits of real estate investing make it one of the most attractive places to park your money, even during a recession. Individually, these tax benefits are powerful tools that dramatically increase the value of real estate...
When it comes to the study of millionaires in this country, Dr. Thomas Stanley collected the definitive body of research. His life’s study is summarized in the book the “Millionaire Next Door.” In it, he found several...
I talk to prospective investors all the time. One question that often comes up relates to the various ways one can invest in multifamily apartments. Hey, if twenty raise their hands and ask, you know that there are a ton more wondering...
Disclaimer! I am not a tax professional nor do I claim to be. The commentary and opinion expressed in this article are to give you a baseline understanding of the issue and ways in which we think about it as active commercial real...
Multifamily apartment growth is driven by demographic trends. The Echo Boomers are the second-largest generation in US history and in the prime renting age. Yet, in a recent Harvard study, Echo Boomers (also known as Generation Y or...
Every year, inflation eats away at your portfolio. Inflation is averaging 2.5% a year for the past decade and a half. Your portfolio must have grown almost 30% in the same time period – just to keep it’s true value. With...
In recent weeks, we have walked through the ideal criteria for a multifamily market, as well as the attributes of the most desirable submarkets. But even after you have narrowed your search to the most ideal location, you need to...
In our last article, we reviewed the 4 crucial features of a stable multifamily market. But even when you have found a market with strong employment and population growth, you need to dig deeper and ensure you are investing in the...
The Market Always Wins. Always. You can invest in a great looking property run by an excellent management team, but if that asset is in a bad market, you will at best tread water. More often than not, you will lose money. While...
Jerry Buss, the owner of the Los Angeles Lakers, died earlier this week after a lengthy bout with cancer. Many will focus on Dr. Buss’s success as a sports team owner. But, the career that led to his well-earned fame is worth a...
A recent Harvard University study released highly promising information for commercial multifamily investors. Four key trends are driving the multifamily sector to historic levels and investors are receiving superb returns as a result....
The Shrinking Shadow During its peak in 2010, more than 14% of all home mortgages were in “Shadow Inventory,” homes that were either delinquent in their mortgage payment (over 10% of all mortgages in Q1 2010) or at some...
A Decade of Negative Returns Last week, the S&P 500 Index made news by hitting a 4 year high. While Wall Street shamelessly hyped this grand achievement, here is the reality: At a time when tens of millions of Americans are nearing...
Successful apartment investors know it is critical to monitor the prevailing real estate trends. And, unlike the volatile equities market, the trends that affect apartment investing are far-reaching and slow-moving – giving the...
Not All Lists are Created Equal If you want to be a successful apartment investor, selecting the right market is one of the most crucial decisions you will make as you manage your portfolio. Each year, we see just about every major...
The most significant factor for apartment investors is the Baby Boomer’s move from homeownership to renting. 2011 is the 65th birthday for the Baby Boomers as they continue to impact every facet of America’s economics....
Retaining and increasing the value of your apartment investment is fundamental to your long-term survival. It is Warren Buffet’s number 1 rule: “First rule of investing..Don’t lose money” To follow that rule...
As housing prices drop, mortgage lenders are requiring larger down payments on homes. Since the housing bust, the down payments demanded by banks to buy homes has ballooned, forcing many people to rethink what they can afford and...
Apartment investing diversification Diversification and the goal of having a diversified portfolio, in general, is an overly abused concept. It is an ideal made popular through a strong push by the equity investment, investment...
Have you considered real estate investing? If so, now is the right time. Consider these pros and cons....
Apartment Investing is a the most proven building block for developing permanent wealth. With sound market analysis and strong property and asset managers you can rest assured that your investment will: Maintain its value...
Investment Property and developing Permanent Wealth are a key parts of the 37th Parallel Properties investment philosophy and approach. It is a slightly different concept than just net worth, and it is worth understanding the...
Real Estate Investing is the greatest wealth builder in history, but it requires a focused plan, determined effort and time. And, like all endeavors, it won’t always go as planned. “I have not failed. I’ve just...
Have you ever seen the movie “Bourne Identity” with Matt Damon? If not, you should. Great movie. Or better yet, read the book by Robert Ludlum. Now, there’s a particular scene in the movie though I want to talk...
A recent summit in Wall Street has provided some interesting insight into what is going on in the Real Estate sector, both here and globally, and predicts what investors can expect in the next 12-24 months. At this summit, David Wyss,...
Winning in Real Estate investing requires that you follow two simple rules: 1) Understand which asset classes have the best risk/reward ratio. 2) Invest in the best locations for your asset class and strategy. In this article,...
Shiny Object Syndrome – How it can derail your investment strategy and how to avoid it. In our daily conversations with investors inside and outside of our community we find certain consistent and repeated trends. One of...
3 Ways to Tell if You are an Investor or a Gambler Real estate investing is a wonderfully lucrative, empowering, and life-changing venture. But it needs to be approached with the right mindset if you want to realize success. We...
Why Real Estate Investing for Cash Flow is Your Safest Bet I’ve been accused on more than one occasion of using too many acronyms. And more often than not it’s a fair accusation! You can blame it on a military...
