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Investing In Multifamily: What To Look For In CoLiving CoWorking Deals
Published to LinkedIn on January 30, 2023
Before we get into the criteria for CoWorking CoLiving deals, let's step back and understand why investors put their money in multifamily real estate.
Multifamily real estate typically offers investors higher dividends than alternative investments like the stock market. Unlike the stock market, multifamily investors do not need to wait to sell in order to receive returns. Investors also receive many tax benefits and commonly have more write-offs. Finally, real estate is typically more stable.
Of course, it's also critical to be knowledgeable about any potential drawbacks associated with multifamily investing. Investment properties with many units need more money up front. Single-family homes are frequently much cheaper than multifamily dwellings. Your lender can demand a bigger down payment for a multifamily property due to the higher cost. Buying multifamily buildings may also expose you to additional competition from other investors.
To combat this, consider creating a syndication—a group of investors who pool their money for real estate investments. Syndications include General Partners and Limited Partners. General partners are the ones putting the deals together, running the day-to-day, and sending out distributions to the Limited Partners. You might contribute money as a Limited Partner for entirely passive investing. Nevertheless, you need a deal first, so how do you determine if a property fits?
What factors are crucial to consider when choosing a building for a CoWorking and CoLiving community?
When it comes to CoLiving CoWorking communities, location can be even more crucial because you'll need to advertise your property multiple niche tenants. A excellent place to start is looking for multifamily homes in less affordable neighborhoods. Look for properties with multiple same sized bedrooms with en-suite bath, and plenty of spaces for cultivating the CoLiving aspect. Then, consider nearby attractions or amenities.
CoLiving CoWorking properties can range from four bedrooms to forty bedrooms. Choose the number of units you feel comfortable managing and where the numbers make sense. HomWork pivoted from four bedroom Villas in Rancho Santa Fe to upwards of twelve unit properties. Typically the more units you have, the more cashflow you generate.
Before choosing a property, it's essential to calculate the potential revenue from multifamily investments. Market research can help you understand how much comparable apartments are renting for in the area where you wish to make an investment. Find out how much others in the area set aside for expenses like utilities, property taxes, etc.
Finally, consider the overall condition of the property. Will you need to set aside more than average for repairs if it's an older building? Does the property need a new roof or upgraded plumbing? It's common to have properties inspected before purchasing anything. Keep in mind the needs of your niche tenants.
Who is the niche tenant for CoWorking CoLiving properties?
CoLiving was considered only for younger generations, but since the pandemic and the forced shift to remote work, workers are taking advantage of working remotely. But not necessarily always at home. With so many industries allowing work from home and remote working, professionals who have previously been tied to their desks can now pack up their laptops and...
Live where you work. Work where you live. Anywhere in the world.
HomWork launched in 2018 providing CoWorking CoLiving spaces to remote and semi-remote entrepreneurs, professionals, and digital nomads. Currently, HomWork's Golden Hills CoLiVilla is the largest CoWorking CoLiving community in San Diego, CA. As we speak, we are getting ready to open the largest oceanside CoWorking CoLiving community in San Jose del Cabo, Mexico. So pack your bags!
There are several ways you can participate in this growing market; if we've caught your interest, schedule a conversation with us.