Cardinal Equity Partners

‘Yes, there is a way.’”

That “way” is ICF, short for insulated concrete form. ICF is a highly evolved building system that uses Lego-like steel-reinforced foam blocks to form cast-in-place concrete walls. It’s a fast assembly process that yields a building envelope of exceptional resilience, energy conservation, and interior quiet.

And one other thing: surprising affordability.

Same Low-Cost Wavelength

“I live in the development world. I have a good grasp of development costs for apartments, hotels, and student housing,” explains Bedford. “With my interests in K.B. Walker, I know the bottom-line costs on ICF. ICF is 100% comparable to wood-frame. If I was solely a developer or a contractor, I might think ICF was too expensive. ICF absolutely pencils out for private market development.

“I’m on the same wavelength as any developer. I require low costs. Does ICF work for every project? No. But it makes a ton of sense for most projects.”

He cites other owner-friendly advantages:

Low Energy Costs. Bedford separately meters units so residents see the super-low utility bills. “Instead of a 30% to 35% rent roll turnover, we’re down to 15%. Residents know it’s a good deal.”
Fewer Noise Complaints. ICF wall systems help silence sound intrusion. Quieter units mean happier, longer-term tenants.
As you weigh your development options, keep ICF in mind. “There are lots of people in the industry who are happy to share their experience and advice,” Bedford suggests. “What’s your showstopper? There’s a high probability ICF can help.”

Capitalizing on Multifamily Market Normalization

After a period of volatility, the multifamily market is showing signs of stabilization. Rent growth has slowed, and vacancy rates have stabilized around 6%. This normalization allows investors to make more informed decisions with reduced market volatility. Investing in markets with strong fundamentals and focusing on long-term value creation through property enhancements and effective management will be key strategies for success in 2024.

Multifamily Success starts with every challenge, not from the comfort zone. 🚀💪

Every great journey begins with a step into the unknown. When our GP team first started in the multifamily investment world, it was anything but comfortable. There were sleepless nights, tough negotiations, and countless obstacles. But with each challenge, we grew stronger and more resilient.

One of the toughest times was securing our first deal. We faced numerous rejections and setbacks, but we refused to give up. We learned to see challenges not as roadblocks, but as opportunities for growth. Each hurdle taught us something new, and each failure brought us closer to success.

Today, we manage a portfolio that we once only dreamed of. This success didn't come from staying in our comfort zone; it came from embracing challenges head-on and learning from them. If you're facing tough times in your journey, remember that it's these very challenges that will pave the way for your greatest achievements. Keep pushing forward, and success will follow.

Addressing the Housing Shortfall with Multifamily Investments

The ongoing shortage of single-family homes continues to drive demand for multifamily properties. High prices and mortgage rates have made homeownership challenging for many, pushing more people towards renting. This trend is expected to sustain the demand for multifamily units, making them a resilient investment option. By focusing on strategic locations and modern amenities, investors can maximize their returns in this high-demand sector.

Multifamily Investing and Interest Rates in 2024

With interest rates expected to stabilize and potentially decrease in 2024, borrowing costs for multifamily investments will become more favorable. This shift could lead to increased demand for multifamily units, driving up property values and rental incomes. Investors should monitor these interest rate trends closely, as they will impact financing options and overall market dynamics.

Navigating Economic Conditions in Multifamily Investing

Multifamily investments are expected to navigate a "soft landing" in 2024, transitioning from rapid growth to a more stable market. Despite this stabilization, several challenges remain, such as an oversupply of new units and higher vacancy rates. Investors can leverage these conditions by focusing on property improvements and capturing the increased demand for long-term rentals driven by the housing shortage and high mortgage rates. Incorporating home office spaces can also attract tenants who work remotely.

2024 Multifamily Market Trends

The multifamily market in 2024 is poised for significant changes. New apartment construction is expected to accelerate, with developers completing approximately 550,000 units this year. Despite a slower pace of job growth, this surge in supply is likely to increase vacancy rates, ending the year at around 7.3%. However, the investment market is predicted to gain momentum, fueled by both new properties reaching stabilization and some distressed sales. For investors, the anticipated decline in interest rates will support greater activity in capital markets.

🚪 Multifamily Investing: One Door at a Time 🚪

Starting your multifamily investment journey can seem daunting, but breaking it down "one door at a time" makes it manageable and rewarding. Here's why this approach works:

Scalability: Begin with a duplex or triplex and gradually expand your portfolio. This way, you learn the ropes while minimizing risk.
Cash Flow: Even a small multifamily property can generate steady income, helping you build financial stability.
Diversification: Each new door adds diversity to your investment, reducing dependency on a single tenant.
Learning Curve: Starting small allows you to gain hands-on experience in property management, tenant relations, and maintenance.
Ready to open new doors in your investment journey? 🌟 Let's take the first step together!

Passive Income Through Multifamily Syndications

Syndications offer a way for investors to earn passive income from multifamily properties without hands-on management. Benefits include:

Diversification: Invest in multiple properties through a single syndication.
Expert Management: Professional sponsors handle all aspects of property management and operations.
Lower Barriers to Entry: Allows for participation in larger investments with smaller individual capital commitments.
Cardinal Equity Partners provides access to well-vetted multifamily syndication opportunities, helping you build passive income streams.

Multifamily Investing and Environmental, Social, and Governance (ESG) Factors

Integrating ESG considerations into multifamily investing can enhance returns and create positive impacts. Here’s how:

Energy Efficiency: Implementing green building practices reduces operating costs and attracts eco-conscious tenants.
Social Impact: Providing affordable housing and community amenities improves tenant satisfaction and retention.
Governance: Strong governance practices ensure transparency and accountability, enhancing investor confidence.
Investing with ESG principles aligns financial goals with social responsibility, benefiting both investors and communities.

Leveraging Technology in Multifamily Investing

Technology plays a crucial role in modern multifamily investing. Here’s how:

Property Management Software: Streamlines operations, from rent collection to maintenance requests.
AI Analytics: The Data provides insights into market trends and property performance.
Virtual Tours: Enhances marketing by allowing potential tenants to explore properties online.
Automation: Reduces manual tasks, increasing efficiency and reducing costs.
Embracing technology can give multifamily investors a competitive edge in today’s market.

Financing Options for Multifamily Investments

Securing the right financing is crucial for multifamily investments. Here are common options:

Traditional Mortgages: Offered by banks and credit unions, these are suitable for smaller properties.
Commercial Loans: Ideal for larger properties, with variable terms and higher loan amounts.
Government-Backed Loans: FHA and Fannie Mae offer favorable terms for multifamily investments.
Private Equity: Partners like Cardinal Equity can provide access to capital through syndications and joint ventures.
Choosing the right financing option can enhance your investment’s profitability and reduce risk.

Multifamily Investing and Inflation

Multifamily properties are considered an effective hedge against inflation. Here’s why:

Rent Adjustments: Leases can be adjusted annually to keep pace with inflation, maintaining cash flow stability.
Asset Appreciation: Property values tend to rise with inflation, preserving the investor’s purchasing power.
Debt Advantage: Fixed-rate mortgages become less expensive in real terms as inflation rises.
These characteristics make multifamily investments resilient in inflationary environments, safeguarding investors' returns.

Understanding Multifamily Underwriting

Thorough underwriting is essential to successful multifamily investing. Key aspects include:

Income Analysis: Reviewing current and projected rental income.
Expense Review: Assessing all operating costs, including maintenance, management, and utilities.
Market Comparisons: Analyzing comparable properties (comps) to ensure realistic projections.
Risk Assessment: Evaluating potential risks and how they might impact returns.
Cardinal Equity Partners employs rigorous underwriting standards to identify high-quality multifamily investment opportunities.

Value-Add Strategies in Multifamily Investing

Value-add multifamily investments involve improving a property to increase its value and income potential. Common strategies include:

Renovations: Upgrading units and common areas to attract higher-paying tenants.
Amenities: Adding desirable features like fitness centers, dog parks, or co-working spaces.
Operational Efficiency: Implementing cost-saving measures, such as energy-efficient appliances or better management practices.
These improvements can significantly enhance the property's net operating income (NOI) and overall value.

The Role of Property Management in Multifamily Investing

Effective property management is key to maximizing the returns on multifamily investments. Here’s why:

Tenant Retention: Good property management ensures high tenant satisfaction, reducing turnover rates.
Maintenance: Regular maintenance and prompt repairs keep the property in top condition, preserving its value.
Rent Collection: Efficient systems ensure timely rent collection, maintaining consistent cash flow.
Legal Compliance: Knowledgeable property managers keep up with local laws and regulations, minimizing legal risks.
Partnering with a professional property management company can significantly enhance the performance of your multifamily investment.

Multifamily Investing and Market Cycles 2024 Q3

Understanding how market cycles impact multifamily investments is crucial. Here’s a breakdown of the four main phases and what to expect:

Expansion: High demand and rising rents characterize this phase. New constructions are common, and occupancy rates are high.
Peak: The market reaches its highest point. Prices and rents are at their peak, and new constructions slow down as the market approaches saturation.
Recession: Demand falls, leading to lower rents and higher vacancies. This phase can be an opportunity for savvy investors to acquire properties at reduced prices.
Recovery: The market starts to bounce back. Rents and occupancy rates gradually increase as demand grows.
By understanding these cycles, investors can better time their acquisitions and dispositions, optimizing their returns over the long term.

Multifamily success is a journey, not a destination. The effort is often more important than the result. 💼🚀

In the world of multifamily investing, every step forward is progress, regardless of the outcome. It's about the dedication, hard work, and perseverance that we put into each endeavor. Success isn't just about reaching a particular goal; it's about the journey we take to get there.

Sometimes, the path to success may not be straightforward, and there may be obstacles along the way. But it's these challenges that shape us, teach us valuable lessons, and ultimately propel us forward.

So, let's embrace the journey of multifamily investing, knowing that every effort we put in brings us closer to our goals. Remember, success isn't just about reaching the destination; it's about the growth, learning, and fulfillment we experience along the way. Keep pushing forward, and success will follow! 💪🏠

Tips to Maximizing Multifamily Investments
Evaluating multifamily investments requires a strategic approach and a deep market understanding. Here are essential tips to consider:

1. Know the local market: Analyze rental and sales comps in the area to gauge market trends. Cardinal Equity Partners provides access to market comps and research, making informed decisions easier.
2. Understand the business plan: Assess the sponsor's risk exposure and capital improvement plans. Consider occupancy levels and projected returns against risk factors.
3. Know the structure: Familiarize yourself with the real estate capital stack and your contractual rights as an investor. Understand the promote structure and sponsorship discretion over cash flow.
4. Diversify your investments: Opt for a diversified approach to manage risk. Cardinal Equity Partners allows fractional and passive investments with low minimums, facilitating diversification.

Remember, while Cardinal Equity Partners conducts thorough vetting, conducting your due diligence is essential. Feel free to reach out to our Investor Relations Team for assistance with any multifamily investment inquiries.

🇺🇸 Honoring Our Heroes This Memorial Day 🇺🇸

As we take this day to honor and remember the brave men and women who have served our country, let’s also reflect on the values they fought to protect—freedom, courage, and perseverance. 🌟

Memorial Day reminds us of the incredible strength and dedication it takes to achieve greatness. Just like the sacrifices made by our heroes, success in life and business comes from hard work, commitment, and resilience.

Here are a few ways we can honor their legacy:

Set Big Goals: Aim high and strive for excellence.
Stay Determined: Keep pushing forward, no matter the obstacles.
Support Each Other: Success is a journey best shared with others.
Give Back: Use your success to make a positive impact in your community.
This Memorial Day, let’s commit to living lives that honor their sacrifice by pursuing our dreams with passion and dedication. 🌟

🌟 Success Begins with a Single Step! 🌟

Success isn’t just about where you end up; it’s about the journey you take to get there. 🚀 Every small step, every tiny victory, and every moment of perseverance adds up to the bigger picture of your dreams. 💪✨

Remember:

Set Clear Goals: Define what success means to you.
Stay Consistent: Keep moving forward, even when it gets tough.
Embrace Failures: They are just stepping stones on your path to greatness.
Celebrate Small Wins: Every little achievement brings you closer to your ultimate goal.
Keep Learning: Growth happens outside your comfort zone.
Believe in yourself, stay focused, and never give up. Your journey to success is unique and only you can make it happen! 🌟🏆

Unlocking Tax Benefits in Multifamily Investing
When it comes to multifamily investments, there are unique tax deductions that can provide significant advantages. Here's how & Commercial multifamily units with over five units often qualify for deductions including:

• Maintenance
• Management
• Marketing fees
• Insurance premiums
• Repair costs
• Utility bills

These deductions cover any expenses associated with attracting and retaining tenants, categorized as marketing and maintenance costs. Passive investors in multifamily can benefit from "pass-through" tax advantages, accessing the same benefits as the sponsor.

It's important to note that we do not offer tax advice. Consult with a tax professional before investing in multifamily. The Ascent Income Fund, structured as a REIT, offers potential tax advantages. This income-oriented fund capitalizes on the demand for multifamily in the U.S., providing private credit for operators nationwide and offering diversified yield to individual investors.

Is Multifamily Investing a Good Idea in 2024?
In 2024 and beyond, macroeconomic factors strongly support multifamily investing. Here are the trends favoring multifamily investing:

1. Rising Homeownership Costs: Single-family homes are at historically high prices and in short supply, making multifamily properties more attractive. With mortgage rates predicted to remain above 6%, many potential buyers are opting to rent instead. With historically expensive and few options for single-family homes, would-be buyers are increasingly renting later in life.
2. Housing Shortfall: The U.S. faces a significant housing unit shortfall, with strong new household formation expected. Combined with robust job figures, demand for multifamily units is expected to outpace supply for the foreseeable future.
3. Persistent Inflation: Despite moderated inflation, experts anticipate its continuation. Multifamily investments are known for their inflation-hedging properties, making them favorable compared to other asset classes.
4. The multifamily construction pipeline was strong up until recently, but the surge in interest rates has changed the equation.
5. The Census Bureau expects multifamily starts to be down meaningfully year-over-year, with the supply pipeline thinning in the years ahead.

This means that multifamily investing is potentially a way to “do well by doing good,” helping to mitigate the massive shortfall of market-rate housing in the U.S. Workforce housing investments are needed, but any investment in density housing can potentially be considered a social impact investment.

A brief note on multifamily cap rates
According to CBRE research, prime multifamily cap rates averaged 5.06% in Q4 2023, up 170 basis points from Q1 2022 and exceeding the pre-pandemic 2018-2019 average by 85 basis points. The cap rate of an individual multifamily property should be a key decision factor. It's also critical to analyze prevailing cap rates in the local market.
Looking ahead, CBRE anticipates multifamily cap rates will widen by another 25-50 basis points in 2024, bringing the average to around 6%. Higher cap rates mean opportunity on two fronts:

1. More attractive current cash flow potential, on average.
2. An opportunity for “cap rate compression” — values increasing for a given level of cash flow, which tends to align closely with interest rate movements.
3. Compared to single-family properties, multifamily investing offers scale. With more units and larger total capitalization projects, multifamily allows for economies of scale like professional property management, value engineering in lease structuring, and property-level marketing.
Larger multifamily projects can also benefit from value-add features like laundry facilities, fitness centers, and dog parks. Fortunately, platforms like Cardinal Equity Partners allow tapping into the benefits of multifamily investing while mitigating the cons.

Is Multifamily investments have proven to be resilient during economic downturns?
1. Stability in Demand: The consistent need for housing ensures stable demand, even during recessions, when other sectors may suffer.
2. Increased Renting During Recessions: Economic downturns lead to a rise in renters as individuals find it challenging to qualify for mortgages, boosting demand for rental apartments.
3. Performance During Past Recessions: Historical data, such as from the Great Recession, shows that multifamily properties rebound quickly after initial volatility, often outperforming other commercial real estate asset classes.
4. Adaptability to Economic Changes: Multifamily investments have shown adaptability across different economic downturns, experiencing positive rent growth even during recessions.
5. Income-Based Valuation: The valuation of multifamily properties is primarily based on the income they generate, adding resilience during market downturns.
Considering the likelihood of a "soft landing" scenario in the economy, where interest rates and inflation gradually decline, multifamily investments are increasingly attractive as a recession-resistant asset class.

Typically, multifamily investments focus on properties with many units and a structured business plan, including lease-up, value-add improvements, and other elements.
Considered one of the "core four" types of commercial real estate investment alongside office, retail, and industrial, multifamily investors aim to increase net operating income (NOI) by raising occupancy rates, increasing rents, or both. Successful multifamily investing often involves exiting at a more favorable sale price, driven by market changes or property improvements.
Please contact for more details: Connect with Luis Blanco, Managing Partner 📞 Office: 713-249-4596 📧 Email: [email protected]

Multifamily Real Estate Investing vs. Single-Family
Investing in multifamily properties differs significantly from single-family homes or flipping, which are often associated with real estate investing. While single-family homes can be volatile due to tenant turnover and vacancies, multifamily properties offer multiple income streams, making them more stable during economic downturns.

Despite the higher initial investment, multifamily properties typically experience fewer gaps in rental income and cash flow. Leasing to multiple tenants provides a hedge against inflation, as rental prices can quickly adjust to market values. Multifamily operators commonly adjust rents to offset inflation, helping to maintain stable cash flow over time.

Key metrics evaluated in multifamily investment include occupancy rate, capitalization rate (or "cap rate"), area sales and rental comparisons ("comps"), and local demand drivers like population and job growth.
Multifamily investments are subject to market forces, with supply and demand dynamics playing a significant role. Supply constraints can drive up rents and property values, while local factors like zoning regulations and macroeconomic conditions also influence market performance.

Multifamily Investing Definition:
Multifamily investing involves acquiring properties designed for multiple tenants, such as apartment complexes or condominiums. This strategy focuses on properties with a large number of units, allowing for economies of scale and greater total return. As the largest sector within commercial real estate, multifamily investing is straightforward and well-understood by many investors. The demand for multifamily properties remains strong despite economic fluctuations, as the drivers and fundamental uses of such properties are clear. This makes the multifamily asset class one of the most stable performers among all types of commercial investments.

Hi, I'm Christina Serna-Blanco, the Managing Partner of Cardinal Equity Partners. With over two decades in healthcare, I've established myself as a compassionate, detail-oriented nurse practitioner dedicated to community well-being. My medical career has given me profound empathy and a holistic view of health.

My commitment to healing extends beyond my medical practice. Together with Luis, I ventured into multi-family real estate, driven by the belief in the vital link between stable housing and overall health. This dual focus on healthcare and housing reflects my deep conviction in the synergy of physical and social well-being.