Q1 2024 Investment Outlook

January 9, 2024

The Capital Stack

Investment Outlook

As anticipated, there has been a notable increase in the volume of opportunities, and we are currently examining a higher number of deals than we have in the past 18-24 months. We’re discovering that several of these opportunities align with our criteria, thanks to a combination of various factors.

  • Sellers are beginning to recognize that ZIRP (zero interest rate policy) days are over and most are more realistically pricing their properties.
  • Rates have decreased. Many deals that didn’t pencil with rates in the high 7% range are now feasible with current rates in the mid-6% range. Our most recent quote for a small deal was at 75% LTV with a fixed rate of 6.43%.
  • As interest rates rose, sellers were stubborn with pricing, insisting on values reflective of what their property might have been worth 6-12 months prior. Rates remained high for an extended period, causing pricing expectations to drop. Although most pricing is still delusional, the gap is narrowing as rates have started to come down.

The Goal for 2024

The Goal for 2024
Our goal for the year is to acquire five properties within our target range of 8-80 units. We are primarily focusing on Metro Detroit Suburbs that meet our criteria.

  • $60,000+ median income
  • $250,000+ average home values
  • Within a 45-minute drive to a major employment hub

Read more about our buying criteria here.

We strongly believe that multiple opportunities will materialize at the beginning of this quarter. Investors registered in our portal receive priority notifications for investment opportunities. We encourage both accredited and non-accredited investors to join our portal or schedule a call to learn more about partnering with us in 2024.

Major Market News


Detroit’s Rental Market

An article by Rent Cafe reviews the dynamic landscape of the rental market. According to the article, ‘renting is the new buying as home prices are still high.’ The article ranks the month’s top ten cities for rental activity and places Detroit at number three, rising three spots from last month. According to the article, there was a triple amount of online traffic for Detroit listings compared to last November. Overall, Rent Cafe’s insightful analysis portrays the evolving trend of renting as a preferred option amidst elevated home prices, with Detroit’s notable rise in online engagement reflecting the growing prominence of the rental market.

Source: RentCafe. (2023, Nov 20th) November Rental Activity Report: Minneapolis Is Most In-Demand City, Two California Destinations Join the List. https://www.rentcafe.com/blog/rental-market/market-snapshots/rentcafe-rental-activity-report/

Tips and Tricks

Terms-

Accredited Investor: An accredited investor in the United States, is someone with an annual income exceeding $200,000 (or $300,000 for joint income with a spouse) for the past two years, or a net worth of over $1 million, excluding the value of their primary residence.

Non-Accredited Investor: A non-accredited investor In the United States, has an annual income below $200,000 (or below $300,000 for joint income with a spouse) and a net worth below $1 million, excluding the value of their primary residence.

ZIRP: Zero Interest Rate Policy. This term is used to describe March 2020 – March 2022 when interest rates were at an all-time low. Real estate pricing skyrocketed during this period.

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