Why and How to Get Started in Commercial Multifamily Investing:
Unlocking Wealth Through Smart Strategies
Hello Readers,
At a recent webinar the Level 7 team hosted we were asked the following questions below that really drew my attention and thought that everyone could benefit from answering.
Why multifamily over stocks or other real estate?
How do I even start investing in these multifamily properties?
How do I know this is the right time to invest, with the craziness in the economy?
Who do I invest with?
Why should I invest with you?
Yes, the world of commercial multifamily investing can seem overwhelming at first, it may seem like you need millions to even get started, but I will explain why those assumptions are wrong and why for those willing to learn, it presents one of the best opportunities for building long-term wealth. Whether you are looking to diversify your portfolio, generate passive income, or leverage tax benefits, investing in multifamily properties can offer significant advantages over single-family homes and traditional stock market investments.
At Level 7, we believe in empowering investors through data-driven education, ensuring they have the knowledge needed to make informed decisions while positively impacting communities. If you’ve been thinking about stepping into commercial multifamily investing, I will explain why the time to invest is now. Let’s explore why multifamily investing is such a strong vehicle for wealth creation how the key strategies on how you can get started.
Why Multifamily Over Single-Family or the Stock Market?
Many investors start with single-family rentals or stock market investments but eventually realize that these asset classes come with limitations:
Scalability – Buying a 20-unit apartment complex is much easier to scale than managing 20 single-family homes.
Cash Flow – Multifamily properties generate multiple streams of rental income from different tenants, reducing financial risk.
Tax Benefits – Depreciation, 1031 exchanges, and cost segregation studies provide tax advantages that single-family homes and stock investments cannot match.
Risk Mitigation – If a tenant moves out of a single-family home, you lose 100% of the income. In a multifamily property, other tenants continue to generate revenue.
Forced Appreciation – Unlike stocks, where value is market-driven, multifamily property values can be increased by improving operations, reducing expenses, and raising rents.
Key Strategies for Getting Started
1. 1031 Exchange: Deferring Taxes to Grow Wealth
A 1031 exchange allows investors to defer capital gains taxes when selling a real estate property, provided they reinvest the proceeds into a like-kind property within a set timeframe. This strategy is crucial for scaling investments without taking a tax hit.
Benefits of a 1031 Exchange:
Defers capital gains tax, allowing for greater reinvestment potential.
Enables investors to scale into larger properties.
Protects wealth by allowing tax-free portfolio growth.
2. Investing with a Self-Directed Retirement Account (SDIRA)
A Self-Directed IRA (SDIRA) or Solo 401(k) allows investors to use retirement funds to invest in commercial real estate while maintaining tax advantages. Instead of relying on volatile stock market returns, investors can generate stable cash flow through multifamily syndications.
Benefits of Investing with an SDIRA:
Tax-Deferred or Tax-Free Growth – Depending on the account type (Traditional vs. Roth).
Diversification Beyond Stocks – Protects your portfolio from market volatility.
Greater Control Over Investments – Unlike traditional IRAs, SDIRAs allow you to pick high-performing assets like multifamily properties.
Why Now Is the Time to Invest in Multifamily
Market data from leading platforms such as CoStar and Yardi Matrix indicate that multifamily properties remain one of the best hedges against inflation. With increasing demand for rental housing, constrained supply, and strong long-term fundamentals, multifamily investments continue to outperform other asset classes.
Recent insights include:
Rental demand is rising as homeownership affordability declines.
Cap rates remain strong, offering better returns compared to single-family rentals.
Institutional investors are increasing allocations to multifamily, validating its stability.
Rising Rental Demand & Declining Home Affordability
Home prices remain historically high, making homeownership less accessible for many Americans.
Mortgage rates are still elevated, pushing more people into the rental market.
Yardi Matrix reports that multifamily occupancy rates remain strong, as the demand for rental housing continues to rise.
Multifamily as an Inflation Hedge
Multifamily real estate offers built-in protection against inflation, as landlords can adjust rents annually to keep up with rising costs.
Unlike traditional fixed-income investments, apartment rents can be increased as demand grows, ensuring that returns keep pace with inflation.
Favorable Supply & Demand Imbalance
The supply of new multifamily units is not keeping up with demand, especially in high-growth markets.
Construction costs and interest rates have made new development more expensive, which further limits new supply.
This imbalance ensures that well-located, existing multifamily properties will remain highly desirable investment assets.
Institutional Investors Are Bullish on Multifamily
Large financial institutions and private equity firms are doubling down on multifamily investments.
CoStar data shows that institutional capital is flowing into high-growth multifamily markets, validating its long-term strength.
This creates strong exit opportunities for smaller investors who get in now.
Multifamily Offers Stability Compared to Other Asset Classes
Compared to the volatile stock market, multifamily investments offer steady cash flow and appreciation potential.
Single-family rentals are harder to scale, while multifamily properties allow for better operational efficiencies and risk mitigation.
Who Should I invest with
The Importance of Education & Partnering with the Right Operator
One of the most critical steps in commercial multifamily investing is aligning with an operator who prioritizes education and transparency. Not all syndicators are created equal, and choosing the wrong partner can lead to lost capital and missed opportunities.
Key Questions to Ask a Potential Operator:
Do they invest their own money in their deals?
What is their track record in multifamily investing?
How do they manage risk and economic downturns?
Are they transparent in their underwriting and financial projections?
At Level 7, we believe in full alignment with our investors. We don’t just educate—we invest alongside you, ensuring our interests are aligned for mutual success.
Why Invest with Level 7 Investors
At Level 7, we have developed the GrowthSync Framework, a proprietary approach that integrates market data, economic trends, and investor education to maximize returns while fostering community improvement.
Our mission is to empower investors through data-driven education so that they gain the knowledge needed to make informed investment decisions while improving the communities we invest in.
🚀 Ready to Get Started? If you’re interested in learning more about commercial multifamily investing and how you can leverage 1031 exchanges, SDIRAs, and strong market fundamentals to build generational wealth, we invite you to book a free 15-minute intro call with me or a member of our C-Level Team.
📅 Schedule your call now:
Book A Call
Let’s build wealth and stronger communities together!
To your success,
Manny Del Val
CFO, Level 7 Multifamily Investors
I can be reached on the following social media platforms
