The stock market has been highly volatile over the past few years. That’s why investors looking for more stable, reliable returns have started focusing on multifamily funds.
Experienced wealth managers often recommend multifamily investment plans to diversify the portfolio and generate passive income. It’s a great alternative for those who can’t withstand the volatility of the equity market.
What exactly is a multifamily investment fund?
A multifamily investment fund collects money from several investors and puts it into multifamily properties to get decent returns. Multifamily properties are residential buildings and complexes with two or more rentable spaces, while single-family properties are buildings with only one available unit to rent.
These funds follow a specific strategy, which defines the property type, location, and tenant profile. One fund, for example, may focus on renovating older buildings across many suburban areas, while another may invest in student housing in a specific metropolitan center.
The fund can also follow more than one strategy based on investors’ risk appetite.
Since rising home prices have made renting more attractive, multifamily real-estate investments can generate a significant cash flow. However, these investments require hefty down payments — even smaller residential buildings (with three to six units) cost millions of dollars in cities like New York and San Francisco.
Fortunately, there are many investment firms that make such high-capital properties more accessible to small investors. To narrow down your research, we have listed a few multifamily investment companies that optimize your investments for better, stable returns.
9. Turner Impact Capital
Founded in 2013
Headquarters: Santa Monica, California
Turner Impact Capital aims to preserve and enrich naturally occurring affordable workforce housing. They focus on underserved markets that have significant inconsistencies between the supply and demand of community-serving infrastructure and associated services.
The company searches for opportunities that could benefit from demographic trends and are often overlooked by traditional investors. This includes commercialized projects and maintenance policies designed to reduce resource consumption (by up to 15%) and enhance resident comfort.
Besides improving resident satisfaction and promoting environmental sustainability, such projects and policies can also minimize operation costs like utilities and turnover.
So far, Turner Impact’s multifamily funds have been able to acquire 12,800+ housing units in near-employment hubs throughout the United States. Their short-term goal is to preserve $2 billion in Naturally Occurring Affordable Housing (NOAH) that serves thousands of low-income households.
8. Riaz Capital
Founded in 1977
Headquarters: Oakland, California, United States
Riaz Capital is a real estate developer-operator that addresses the evolving housing needs of the Bay Area. It focuses on student housing, small units, conventional multifamily, and co-living projects.
Each project is designed in such a way that middle-income professionals can easily afford it and proudly call it home. The company places greater emphasis on personal privacy and utilization of open space while avoiding needless constructions that drive up prices.
Riaz Capital has been following this strategy for more than a decade. Today, they have more than 3,000 units under management and development (worth over $500 million).
They aim to provide affordable, high-quality homes to 5,000 residents within four years.
7. 37th Parallel Properties
Founded in 2008
Headquarters: Richmond, Virginia, United States
37th Parallel Properties invests in stable money-generating assets in select markets throughout the US. Their portfolio contains a huge chunk of B and B+ assets located in the mid-South region of the country.
Every investment is conservatively underwritten by the company’s acquisition team and then validated by external management professionals as well as some of the top lending underwriters in the commercial multifamily industry.
Their primary goal is to increase cash flow year over year and build permanent wealth for investors. Their clients can expect a 6 percent average annual cash flow (distributed every quarter) and a 13% annualized cumulative return from all sources (including cash flow and equity growth).
6. Hunt Capital Partners
Founded in 2010
Headquarters: Los Angeles, California, United States
Hunt Capital is a subsidiary of Hunt Companies, a family-owned holding firm that invests in infrastructure assets, real estate assets, and operating businesses.
Hunt Capital specializes in managing federal and state Low-Income Housing Tax Credits (LIHTC), Historic Tax Credits, Solar Tax Credits, and the Rental Assistance Demonstration (RAD) program.
The company has raised about $2.9 billion in tax credit equity, which puts it among the ten largest affordable multifamily investment funds in the US. These funds have created and revived numerous communities in 40+ States, as well as in Saipan, Puerto Rico, and the Virgin Islands.
Their biggest investment partners include tech firms, banks, and insurance companies.
They offer comprehensive asset management services, ensuring maximum tax benefits and timely reporting. Whether you want to focus on Community Reinvestment Act or obtaining stable returns, or both, the company can structure your investment as per your specific requirements.
You can contact them to learn more about multifamily investment opportunities.
5. Hamilton Zanze
Founded in 2001
Headquarters: San Francisco, California, United States
Hamilton Zanze specializes in the acquisition and hands-on operations of apartment communities in specific markets. They primarily invest in projects focusing on new capitalization, new management, and green initiatives.
The company has decades of experience in multifamily property acquisition, asset management, financing, construction management, and risk management.
They continuously look for opportunities where they can generate stable cash flow, protect investors’ capital, and achieve appreciation. Their asset managers carefully monitor the performance of properties and seek opportunities to increase operating income and net value.
Moreover, Hamilton Zanze’s relationships with lenders, property managers, owners, and brokers give them an edge over their competitors.
Since its inception, the company has acquired more than $5.9 billion in real estate assets, primarily in the Eastern, Western, and Southwestern United States. Its current portfolio includes 132+ properties and 22,820+ units across 15 states.
Founded in 2003
Headquarters: Dallas, Texas, United States
Presidium is a vertically-integrated real estate company with more than $2.5 billion worth of assets under management. It works in a wide range of disciplines, from property acquisition and development to accounting and public-private partnerships.
Their main strategy is to acquire and rehabilitate underperforming properties in strong markets and submarkets. They usually employ third-party designers and architects to renovate the entire property and make units available for people of all income levels.
The company has spent more than $120 million on renovations across the portfolio.
- 50+ multifamily, retail and land assets
- 10,000+ units
- 300+ team members
Presidium also offers several partnership solutions, such as preferred equity and co-GP arrangement, to operators and developers across the United States.
3. Praxis Capital
Founded in 2013
Headquarters: Santa Rosa, California, United States
Praxis Capital is a vertically integrated real estate private equity investment company combining an entrepreneurial strategy with an institutional infrastructure. It implements both tactical and strategic methods to buy underperforming residential properties in the United States that can be efficiently transformed through repositioning and renovation.
Property Acquisition Criteria
- Should have at least over 100 units
- Must be well located, underperforming assets
- Should be either Class A or Class B property, or Class C+ if it can be repositioned to B
- In Southeast and Southwest regions
Praxis Capital applies both a top-down and bottom-up technique to deeply analyze every property. The top-down methodology involves utilizing advanced economic and market forecast models to identify underperforming assets, while the bottom-up methodology involves evaluating the property based on its condition and local market circumstances.
All in all, the company always looks for profit-making opportunities while managing $200 million worth of real estate assets. Their senior executives have $5 billion of transactional experience in multifamily, with an excellent track record of no investor losses.
2. Trion Properties
Founded in 2005
Headquarters: West Hollywood, California, United States
Trion Properties is a vertically-integrated real estate investment company that acquires off-market, undervalued properties in developing regions. It then converts those properties (through hands-on management and tactical renovations) into attractive places to live.
This simple (yet not easy to implement) approach allows the company to deliver decent returns without taking outsized risks. Since its inception, it has delivered an average internal rate of return (IRR) of over 25%.
How do they do it?
- Identify the right markets to invest
- Capture favorable entry prices
- Unlock value with customized renovations
- Offer buyers a high-quality well maintained asset
Each investment goes through a rigorous third-party auditing process, with detailed reports made available to all current and prospective investors. As of now, the company accepts only accredited investors who can deposit $50,000 or more.
1. Monarch Investment and Management Group
Founded in 1992
Headquarters: Franktown, Colorado, United States
Monarch focuses on purchasing and managing cash-generating properties, especially multifamily apartment communities. It offers various opportunities to earn quarterly income and decent long-term returns on your investments.
Their team evaluates real estate assets based on the following factors —
- How much net operating income and cash flow can it generate over a long-term hold?
- Availability of financing options and repositioning strategies
- Ability to increase rents through small upgrades and renovations
- Can it compete with newer properties within the same region?
Moreover, the company carefully inspects the architecture, reviews past leasing activities and current operations, and scrutinizes the apartment to its own high standards.
Unlike most real estate investment trusts and brokers, Monarch assists you throughout the investment process. The same professionals who verify and acquire the project are the ones who manage the asset on a daily basis.
The company currently manages about 80,000 apartments in 20 states.
Other Equally Good Multifamily Investment Companies
10. Alliant Capital
Founded in 1997
Headquarters: Woodland Hills, California, United States
Alliant Capital, one of the largest multifamily investment firms in the United States, focuses on tax credit syndication for developing and financing affordable multifamily rental housing.
Since they have a dedicated team of experienced asset managers, real estate executives, and tax and legal professionals, they can deliver fully integrated investment support services.
The asset management team, in particular, is responsible for identifying and mitigating operating and compliance risks. It works closely with the construction team to review monthly draws and process equity draw requests.
So far, the company has raised over $8 billion in equity, closing 1,000+ tax credit investment deals. Their current portfolio consists of more than 100,000 multifamily apartments.
11. Worcester Investments
Founded in 2006
Headquarters: Kansas City, Missouri, United States
Worcester Investments handles all elements of multifamily real estate in-house. It specializes in purchases, construction, finance, and property management, making it easier for clients to access all the information they need in one place.
Unlike most other investment firms, Worcester Investments features zero management fees and monthly dividend distribution. They invest money in risk-adjusted, high-return properties with the sole purpose of creating generational wealth.
The company has over $500 million in assets under management, including 4,000+ apartment units in the Midwest area.
12. CONTI Capital
Founded in 2008
Headquarters: Dallas, Texas, United States
CONTI Captial invests money on behalf of institutions, wealth managers, and high-net-worth individuals. It provides capital solutions to purchase, manage, and sponsor real estate assets throughout the nation.
The company has developed its own data model to precisely analyze changes in supply-demand and scrutinize real estate markets down to the zip code levels. This data model processes millions of data points across hundreds of unique indicators like real-time demographics, housing affordability, employment, commute distance, rent growth, and many more.
The company then acquires properties that meet or exceed its strict investment criteria. So far, they have made $1.2 billion worth of transactions to acquire 12,000+ apartment units.
13. Ashcroft Capital
Founded in 2015
Headquarters: New York, United States.
Ashcroft Capital seeks to create value through extensive renovations, complete rebranding, and tightening operational inefficiencies. They target perfectly-located buildings in Dallas and throughout the Southeast.
They follow a conservative acquisition approach and hands-on asset management strategy to grow investors’ wealth in a stable manner. While the company is foremost focused on capital preservation, this strategy has worked well in the past several years.
Ashcroft has delivered phenomenal returns — 32% growth in net operating income, 21.7% internal rate return, and 1.8x equity multiple — based on full-cycle dispositions.
It currently manages $265 million worth of assets, including 12,550+ apartment units.
More to Know
What are the advantages of investing in multifamily funds?
Investing in multifamily properties has more benefits than harm, provided that you select a good, trustworthy company to manage your investments.
Cash flow: The biggest benefit of investing in a multifamily fund is you get rental income every month from multiple tenants. Besides a strong cash flow, you get a steady appreciation in the value of your portfolio.
Easier to Finance: Since multifamily real estate generates a significant cash flow every month, it is relatively easy to be approved by a bank for a loan compared to an average house.
Build a large portfolio in less time: Acquiring a 10-unit residential complex is quite easier and more time-efficient than buying 10 different single-family houses.
Scalable: Multifamily real-estate investment benefits from economies of scale. One can focus on commercial properties to generate even greater cash flow opportunities.
Key factors to consider when looking for multifamily investment funds
Take these factors into account to avoid getting stuck with a bad investment firm:
1. Experience: Look for funds who have at least 5-7 years of experience. You don’t want to give your hard-earned money to someone who has just started.
2. Firm’s Mission and Vision: Check if the company has a long-term vision. Read how they get started and what services they mainly focus on.
3. Investment Approach: Review the company’s website to see how (and where) it invests money and how much it pays its investors. Some firms charge a ridiculous fee to maintain and renovate properties.
4. Partnership and Relationship: The best way to analyze a company’s partnerships and relationships is to review their existing properties. Ask them about their current investments and visit properties to see how well they are maintained.
5. ESG: Check if the company follows the ESG (short for Environmental, Social, and Governance) protocols.
The multifamily sector
The multifamily investment sector is large and mature, especially in North America and parts of Europe. In Germany, it accounts for about 45% of property investment, 38% in the United States, 32% in Sweden, and 31% in Canada.
Market size and liquidity rely on how much the rental market is owned by institutions. In the United States, institutional ownership is about 40%, followed by 13% in Germany and 6% in Spain.
Why you can trust us?
We thoroughly analyzed 25 multifamily investment companies in the United States. It took more than 20 hours to do the comprehensive research, after which we decided to shortlist the 13 firms based on their asset under management, past performance, and experience.
We DO NOT earn commission from any of the listed firms. Furthermore, we have two separate editors who have no influence over our listing criteria or recommendations.
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