Robert Kiyosaki on Multifamily Real Estate Investing
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While the stock market can be profitable, some investors do not like its volatility so they look for other paths toward financial freedom. Real estate usually fills that role.
A private investor may go for real estate as an alternative to the stock market because it’s a reliable way to generate a consistent cash flow. Plus, there are multiple ways to participate in real estate investing so you can easily find one that fits your investment strategy.
If you prefer to take an active role in growing your capital, then you can look for private lenders, choose a great investment property, flip it, and resell it. Some investors buy investment properties with their own money and rent them out. Others go for the passive route and participate in multifamily syndication deals, which we will discuss later on.
But before we explore this particular investment vehicle, we will discuss why some successful investors like American entrepreneur Robert Kiyosaki stand by multifamily real estate investing.
Robert Kiyosaki is the author of over 26 books, including the self-published personal finance book series Rich Dad Poor Dad, which has sold over 41 million copies worldwide and has been translated into 51 languages. He is also the founder of Rich Global LLC and the Rich Dad Company, which gives personal finance and business education through books and videos.
Here we take a closer look at why Kiyosaki recommends multifamily investing.
Why Rich Dad Poor Dad Author Robert Kiyosaki Loves Multifamily Investing
There are two main types of properties that investors can put money into when it comes to residential real estate: single-family and multifamily properties.
For investors who are looking for an additional source of monthly income, the preferred investment strategy is buying multifamily rental properties. Investing in multifamily properties can provide a steady cash flow along with a slow and steady appreciation in your investment portfolio.
Single-family properties only have one unit to rent, while multifamily properties have more than one space that can be rented. Duplexes, triplexes, four-plexes, apartment complexes, and condominiums are all considered multifamily properties because they can support multiple tenants.
While smaller homes have fewer barriers to entry, large multifamily properties offer several significant advantages.
Rich Dad Poor Dad’s Robert Kiyosaki says multifamily investing is a great investment for retirement. He referred to low interest rates and depressed pricing as reasons to try apartment investing especially for those facing retirement. Kiyosaki cited an article he read from The Wall Street Journal by Tom Lauricella entitled “Want a Job? Become a Landlord”. 
Kiyosaki also stated that the long term trend in the US leans towards renting, and that is a good sign for landlords.
“Fast forward over ten years later, and much of Lauricella’s justifications still exist today. Interest rates are at all-time lows. Rents are rising aggressively in many cities,” he wrote. 
He said that the reason he had been preaching for years that cash-flowing real estate is one of the ultimate investments is due to the tax benefits, the ability to receive cash each month, and the leverage.
Benefits of a Multifamily Real Estate Investment Property
Although large multifamily properties are more expensive, they are actually a lot easier to finance. Investors may think that securing a loan for a single-family property is easier, but banks are more likely to approve a loan for multifamily properties than the average home.
The reason for this is simple: apartment complexes and other multifamily real estate can generate a strong monthly cash flow. These properties do not have to worry as much about vacancies. Unlike single-family properties, apartment buildings can still generate income even if one or two units become vacant. 
Not only is the cash flow larger, it is also more consistent and reliable. If a single-family real estate property becomes unoccupied, then it becomes 100% vacant. This means the cash flow would come to a complete halt. This is not the case for multifamily properties.
Growing a portfolio using a multifamily property also takes less time. This makes it ideal for investors who want to build a large portfolio of rental units. You can be a lot more efficient when it comes to portfolio building by purchasing a 20-unit apartment building instead of purchasing 20 different single-family homes and securing loans for each one.
Multifamily properties produce a strong enough cash flow that it puts investors in a position wherein property management makes sense financially. Not all real estate investors want to be landlords due to the added responsibilities and challenges of running an apartment complex. With a strong enough cash flow from monthly rental income, they don’t have to.
Investors may hire a property management company to handle all the day-to-day operations of their rental properties. These property managers are typically paid a certain percentage of the monthly income generated by the property. In exchange, they screen and manage tenants, collect rent payments, deal with emergencies, resolve conflicts, handle evictions, maintain the property, etc. 
Kiyosaki says that control is another benefit of owning a multifamily real estate property. Since you own the property, you have control over its income and expenses. It is also not subject to the ups and downs of the market.
In fact, the property’s value even increases over time. By strategizing and managing the property, investors can increase rent rates as their expenses go down. This increases the real estate property’s value. 
Finally, owning multifamily real estate can also offer you plenty of tax advantages. Investors can write off depreciation as an expense against their revenue even if the property technically appreciates in value. There are also tax credits available for investors who offer low-income housing or restore a historical building. 
How a Real Estate Investor Can Succeed in Multifamily Investing
If you are set on purchasing a multifamily property all by yourself, you need to choose your location carefully. Real estate is all about location, but especially so for multifamily properties. Look for properties in areas where tenants would prefer to rent in. It needs to have easy accessibility to schools, hospitals, and places to eat. Look for areas that are known to be safe, have a low crime rate, and have easy access to transportation. 
Once you have purchased the ideal multifamily property, consider hiring a property manager. Being a landlord is not an easy thing to do, especially for those who do not have any experience with property management. If you are jumping in and purchasing a large multifamily property right off the bat, this may overwhelm you.
According to Robert Kiyosaki, investing should be your job rather than management. Finally, Kiyosaki encourages investors to start now, regardless of your age.
“While I think it would be smart for those nearing retirement to consider multi-family investing, it would be even smarter for the young people reading this post to begin investing,” he said. “As the old saying goes, “Youth is wasted on the young.” Don’t let your youth be wasted. Rather begin planning for your future by investing in your financial education and building a portfolio of assets that will provide for you and your family when you’re ready to retire.” 
Know your budget and keep it in mind when selecting a multifamily property to purchase. Large apartment complexes can easily cost millions of dollars. You will also have to spend on renovating it and making sure it is profitable.
If buying an entire multifamily property by yourself is out of the question, there is an alternative for you to consider: real estate syndication.
What is a Multifamily Syndication Deal?
Investors who are interested in multifamily real estate do not necessarily have to purchase an apartment complex all on their own. These properties are generally expensive, costing millions, which is too much for a regular investor. Accredited investors should factor in their time and scale out the ROI and their return on time.
If you are not hiring a property manager, multifamily real estate properties are very time-consuming to manage, unless you have your own team in place to manage them for you.
Multifamily real estate syndication is the alternative that allows investors to enjoy all the benefits of owning a multifamily property without the usual headaches that come with it. When it comes to real estate investing, this investment strategy takes a lot less work.
A real estate syndication is a form of real estate investing wherein multiple investors pool their funds together to buy a single property. A syndicator locates a real estate property, puts together the syndication deal, secures the financing, and finds accredited investors who will participate in the deal. These investors will provide most of the capital needed to purchase the property in exchange for a share of the monthly cash flow and the equity upon resale, depending on the deal structure. 
While syndication deals can be formed around any type of real estate, multifamily syndication is the most popular one because of all the benefits mentioned above. As a part of the syndication deal, you can enjoy all the benefits of owning an apartment complex but without taking on the role of a landlord. This is a great source of passive income.
With a syndication deal, investors can buy a large multifamily property with a much smaller capital. They can participate in investments that they normally would not be able to. 
This is a passive investment since the syndicator also takes care of property management. They may hire a third party property management company or, in the case of BAM Capital, manage the property themselves. This is the best way to invest in multifamily real estate for passive investors.
Real estate syndication deals are typically exclusive to accredited investors. Work with BAM Capital today to participate in the best multifamily syndication deals in the Midwest.
Work with BAM Capital for Multifamily Real Estate Syndication
BAM Capital is an Indianapolis-based real estate syndicator with a strong Midwest focus, prioritizing class A, A-, and B++ multifamily assets that have an in-place cash flow and proven upside potential. 
Real estate investors looking to participate in multifamily syndication deals should work with BAM Capital. This syndicator will cover all the steps of the investment life cycle.
Thanks to its vertical integration, BAM Capital is able to handle everything from purchasing to remodeling to property management. They will negotiate the purchasing and financing of high quality multifamily properties on your behalf. 
BAM Capital has a strong and consistent track record thanks to its award-winning multifamily investment strategy that creates forced appreciation. They can mitigate investor risk and target a consistent monthly cash flow. In fact, BAM Capital now has $700 million AUM and 5,000+ units. 
No investment is without risk. Make sure to consult your investment advisor or speak to a BAM Capital investment team member before making any financial decisions.
Accredited investors can schedule a call with BAM Capital and invest today.
BAM Multifamily Growth & Income
The BAM Multifamily Growth & Income Fund IV, a private real estate fund, seeks to balance cash flow stability, capital preservation, and long-term capital appreciation while providing superior risk-adjusted returns to investors.
Benefits of Multifamily Investing:
- INFLATION HEDGE: ability to raise rents on short-term leases to mitigate rising costs
- TANGIBLE ASSETS WITH CASH FLOW STABILITY: a consistent income stream that is not impacted by the ups and downs of the stock market
- ACCELERATED TAX BENEFITS: performing a cost segregation analysis and accelerating the allowable depreciation can lead to major tax savings
- SUPPLY & DEMAND IMBALANCE: there is not enough housing supply in most US markets to keep up with the demand
- CAPITAL PRESERVATION & APPRECIATION: typically low-risk investments that should produce optimal risk-adjusted returns.
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