MultiFamily Insights

November 9, 2021

… and why we’re going “all-in”

#1 Favorable Supply and Demand

We’re already seeing 18-24% rent increases since we signed the purchase contract vs. our Year 1 pro-forma of only 6% !

  • New Supply Constrained – Royal Sienna is the only new-build within 10-miles, built by the nation’s #1 builder, and there’s only one remaining multi-family zoned parcel in the entire Sienna Plantation master-planned community, Houston’s #1 master-planned community.
  • Hyper-Demand Growth – Fort Bend County, Texas’ #1 fastest-growing suburban county, has tripled in population since 2000, and the 1-mile radius population has grown 92% in the past 10 years.
  • Texas Medical Center – The #1 world’s largest medical campus is now undergoing a $1.8 Billion expansion that will add 42,000 jobs, and thanks to the new Fort Bend Tollway that extends right to Royal Sienna’s doorstep, it’s the suburban commute-of-choice for the rapidly-growing high-income Texas Medical Center working community.

#2 Multifamily is the Best Investment During Rising Inflation

Multifamily is already perhaps the best investment out there … but thanks to raging inflation, we’re now seeing 20% rent increases at the property we closed 2 months ago … without doing a thing ! 

  • Rents Increase – Short 1-year or less lease durations allow rents to increase with inflation.
  • Loan Payments Flat – Loan payments stay relatively flat.
  • 5X Leverage – The increasing difference between Rents and Loan payments is Profit, which grows over time and is then multiplied by X5 thanks to ~80% financing.

#3 Class-A in High-Income Submarkets is the Best-of-the-Best

CAP rates for Class-A are shockingly within 0.5% of Class B/C … despite being brand new – without the capital expenses and repair costs of older Class B/C properties !

  • Discretionary Income – Royal Sienna tenants pay only 1/6th of the submarket’s median income in rent, so they can easily absorb inflationary rent increases, whereas Class B/C tenants already typically pay 1/3rd of their income in rent.
  • No Rising Capital Expense Costs – Royal Sienna is not exposed to inflationary capital expense prices and material shortages, since it’s brand new and those costs have already been spent during construction.
  • Least-Competitive Class – Class A is now the least competitive class, due to its high price barrier-to-entry, while Class B/C are now the most competitive, due to the influx of new syndicators chasing fewer un-renovated properties.

Jeff Bartlett is based in Southlake, TX and founder of Dragon Prosperity LLC, which brings investors together to acquire real estate assets once out of reach to individual investors. If you want to learn how to …

  1. Take money off-the-table in the stock market without paying taxes
  2. Diversify your portfolio with real assets people need
  3. Receive years of 9%+ cash flow tax-free
  4. Achieve an outstanding total return-on-investment
  5. Multiply your returns as today’s ragging inflation increases

… then take action … Schedule a 30-minute Virtual Coffee … and take a Video Tour of our latest project.

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