In the fast-paced world of real estate syndication, where investors seek lucrative opportunities, it’s easy to get caught up in the excitement of promising high returns. However, as recent events have shown, failing to plan for unexpected shifts in the market can lead to disappointment and financial stress. 

Some syndicators, who shall remain nameless, are now grappling with the consequences of overly optimistic underwriting. For instance, they didn’t anticipate the dramatic rise in interest rates, which has left their investors in a precarious position. Additionally, their assumptions of perpetual 20% annual rent growth are proving to be wildly unrealistic. 

 At MultiLiving Solutions, we take a different approach. We believe in under-promising and over-delivering. Our underwriting process is deliberately conservative, leaving room for unexpected changes. Here’s how we do it: 

• Fixed-Rate Loans: We focus on deals that cashflow with fixed-rate loans with long maturities. This shields our investments from the volatility of floating rate loans. 
• Stress Testing: We stress test our numbers by considering worst-case scenarios. We factor in 0% rent growth in the first year and only 3% growth thereafter. We also account for a slightly higher vacancy rate upon takeover. 
• Construction Costs: Rising construction costs are a reality. We incorporate this into our projections and allow for longer completion times for value-add renovations. 
• Realistic Projections: We never promise lofty, unreasonable returns. Instead, we offer solid, dependable projections that our investors can trust. 

 Our conservative approach means we only pursue deals that truly stand out. Diamonds in the rough.  

 Even if challenges arise – be it rising interest rates, slower rent growth, or unforeseen hurdles – our investments remain on a steady course. 

 When evaluating a passive investment, it’s essential to ensure that the directors prioritize the safety and security of your capital. 

 If you’re interested in learning more about our underwriting process or have questions you should ask a syndication company, be sure to check out our eBook: “Your Success Guide – 35 Questions for Savvy Passive Apartment Investors.” 

 It’s a valuable resource for those looking to make informed investment decisions.