The Great Repricing: Why 2025 Is the Year to Buy Value-Add Deals
Dear Friends,
We’ve all been waiting for “the moment.” The shift. The correction. The sweet spot between panic and opportunity.
Well, it’s here.
2025 is officially the year of the Great Repricing in commercial multifamily—and savvy investors who know how to spot value-add opportunities are stepping in while others sit on the sidelines.
Let’s talk about what’s driving it… and why this may be your best entry point in over a decade.
A Perfect Storm for Buyers
Over the past 18 months, we’ve seen a dramatic change in the multifamily landscape:
Cap rates are decompressing. After hovering at record lows (4.25%–5.00%) in 2021–2022, average cap rates are up to 5.75%–6.5% for Class B/C assets in many Sunbelt markets.
Loan maturities are hitting. $1.5 trillion in commercial real estate debt is maturing by the end of 2026. Many operators are underwater or forced to refinance at higher rates—and buyers with dry powder are benefiting.
Sellers are finally adjusting. According to MSCI, multifamily transaction volume dropped 64% in 2023—but 2024 saw a 22% increase in Q1 as sellers accepted the new reality and repriced accordingly.
The result? Assets that once traded at $150K per door are now hitting the market in the $115K–$130K range, with room for renovation premiums and operational upside.
What This Means for Value-Add Investors
If you're hunting for deals where you can buy low, renovate smart, and grow NOI—this is your season.
Here’s why:
Rent growth is returning. Despite the doom-and-gloom headlines, markets like Louisville (+5.2% YoY), Kansas City (+4.6%), and Charleston (+6.1%) are seeing healthy rent gains.
Construction has slowed. High interest rates and expensive materials have delayed or canceled many new developments. That’s reducing future supply—and increasing the value of well-positioned existing assets.
Distressed assets = creative entry points. We’re seeing more loan assumptions, seller financing, and JV opportunities on deals that wouldn’t have penciled last year.
Real Deal Example:
We recently analyzed a 40-unit property outside of Indianapolis where:
Cap rate has jumped from 5.25% to 6.75%
Asking price dropped 14% in 90 days
With $7K/unit in renovations, rents could increase by $150–$200/month
Projected Cash-on-Cash Return = 7.1%
Projected Equity Multiple = 2.3x over 10 years
In 2021, this property would’ve had 15 offers on day one. Today? It’s available, negotiable, and prime for a sponsor with a clear business plan.
Where We’re Looking Now
At Level 7 Investors, we’re zeroed in on:
Tertiary Sunbelt markets with job growth and population inflows (think Bowling Green, KY… Summerville, SC… and Grimes, IA)
1980s–2000s vintage with solid bones and mismanaged operations
Properties with a renovation budget of $5K–$10K per door and 20%+ potential rent upside
We’re underwriting to at least a 2x Equity Multiple and 5–7% CoC Return, using conservative assumptions.
If a deal doesn’t make sense today—we walk. But we’re finding more that do, and that’s exciting.
Your Move
If you’ve been waiting for the right time to invest in multifamily…
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Let’s build wealth differently—starting now.
To your success,
Manny Del Val
Founder and CFO | Level 7 Investors
📍 Investing with integrity. Building generational wealth.
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