What should I expect as a realistic return on investment for multifamily projects?
Description: A detailed account of returns I achieve in my multi-family projects currently
Honestly this can be all over the place depending on the quality of the project, the quality of the management and a few other important factors.
But within the universe of projects in which I and my investor clients have been involved, I can say that our projects have quite consistently averaged a total return in the range of 20-25% per year. Probably 6-8% of that comes in the form of cash flow from rents, and the remainder comes in the form of capital gains that are realized at the end of the project.
Now I’ve got to reiterate that 20-25% per year in total return has been very normal for MY projects, and I’m sure that the reason we’ve gotten such strong results over time is because we’re so very careful when picking our projects on the front end. So, if you’re involved in someone else’s projects, I couldn’t really tell you what is typical for them, since you’ll find that results tend to follow the people who run the projects. But again, as for my projects – the ones to which I’ve introduced my clients who were looking for strong investment opportunities – my projects have averaged solidly 20-25%+ per year over many years and over many different projects.