🔮 Is this a turning point for multifamily?

👋 Hello, Best Ever readers!

In this week’s newsletter, rents rise again, Trump goes on a tariff tear, hoteliers brace themselves, and apartment hunters lock in.

Today’s edition is presented by Capital Gains Tax Solutions. Selling a property shouldn't mean losing 20-50% to taxes. Let Capital Gains Tax Solutions create your personalized exit plan and calculate your savings today.

👉 Big things are happening in the Best Ever Community! If you want a piece of the action, apply here to join. For serious investors only.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

Trump’s Tariff Tear: President Trump announced new tariffs Wednesday, including 34% on Chinese imports and 20% on European Union goods. These taxes target nations with trade surpluses against the U.S., threatening to disrupt global trade while raising prices for American consumers.

Hospitality Headache: Hotels are bracing for tough times as owners fear that Trump's trade policies may harm international tourism, with Tourism Economics predicting a 9.4% decrease in international visitors — the steepest drop in 20 years. 

Holding Steady: CRE markets appear to be stabilizing with flat asking prices and cap rates across sectors. Retail remains resilient with 6.55% cap rates, while multifamily sees climbing cap rates (now 7.08%) despite having the highest absorption rate at 1.2%.

Continued Crisis: The Trump administration's budget cuts threaten affordable housing nationwide, targeting CDFI funding, canceling retrofit programs, and terminating housing vouchers early. Developers are struggling as investor uncertainty grows amid the seven-million-unit affordable housing shortage.

Population Trends: Southern markets are dominating population growth, with Myrtle Beach leading both historical (4.6%) and forecasted (3.9%) five-year trends. Florida claims multiple spots in the top 10, while Northeastern markets and top California markets face continued declines.

🏆 TOP STORY
THE STATE OF MULTIFAMILY RENTS

In some positive news for the multifamily sector, median multifamily rents rose 0.6% in March to $1,384, the second consecutive monthly increase, according to Apartment List's April report. Despite this, YoY growth remains negative at -0.4%. Current rents sit 4% below their August 2022 peak but remain 20% above January 2021 levels, reflecting the lasting impacts of pandemic-era price surges.

Other key takeaways from the report include:

• Record-High Vacancy Rates: The national vacancy index has hit 6.9%, the highest since tracking began in 2017. This stems from a surge in new inventory, with 2024 seeing the most apartment completions since 1986 and approximately 750,000 units still in the pipeline.

• Longer Time-on-Market: Vacant units leased in March spent a median of 34 days on market, down from February's 36 days but still three days longer than last year and 10 days longer than March 2022, reflecting the impact of increased supply.

• Regional Variation: While 82 of the 100 largest cities saw monthly rent increases, YoY trends vary significantly. Sun Belt metros with rapid inventory growth show the steepest declines (Austin -6.3%, Denver -5%), while Fresno leads nationwide with 6.1% growth, followed by various coastal and Midwestern markets.

WHAT IT ALL MEANS

The rental market's stabilization after its mid-2022 cooling signals a pivotal moment for multifamily investors. With YoY growth improving from -1.4% to -0.4% and 59 of 100 cities showing positive growth, 2025 promises modest rent increases as completions decline. The clear regional divergence means success will favor those targeting supply-constrained coastal and Midwestern markets over the oversupplied Sun Belt regions, focusing on areas with limited pipelines and sustainable demand.

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Don't settle for outdated strategies. The Deferred Sales Trust advantage gives you flexibility, time, and control while allowing your wealth to compound as you slowly pay taxes over time.

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🗺️ ON THE MAP
WHERE APARTMENT HUNTERS ARE LOOKING MOST

The Midwest has caught up to the South as the most in-demand region for renters, with 11 cities each in the top 30 on RentCafe's latest rental activity report.

Here’s a breakdown of the top 10 cities for rental activity:

• Washington, D.C., holds the top spot for the fifth consecutive month with 66% more favorited listings YoY. Despite slight dips in page views (-9%) and saved searches (-8%), the capital continues to attract significant interest from renters in Baltimore, New York City, and Boston.

• The Rest of the Top Five: Cincinnati climbs to #2 with 14% more favorited listings and 39% more available units; Chicago surges nine positions to #3 amid 10% fewer available listings; Kansas City rises to #4 with 23% more favorited listings despite 7% lower availability; and Atlanta drops to #5 with decreases in both favorited properties and saved searches.

• Completing the Top Ten: Columbus, OH; Minneapolis; Overland Park, KS; St. Paul, MN; and Portland, OR, round out the top ten, with Portland cracking the top 10 for the first time in over a year.

The Midwest dominates the top 10 with seven cities featured. Newcomers to the top 30 include San Jose, The Bronx, and Stockton, which jumped 67, 57, and 55 spots, respectively. Overall, metrics show apartment hunters are spending less time on research before committing to leases, indicating that renters are growing increasingly decisive.

🏘️ DEAL OF THE WEEK
2X VALUE AND 110% COC RETURN IN 16 MONTHS

Tim Vitale doubled the value of this 24-unit multifamily property in 16 months and is generating 110% cash-on-cash returns per year.

Here's how he did it 👇

🏢 Property Details: Located in Florence, SC, this 24-unit Class C asset was purchased in August 2022 with 100% occupancy.

💸 Finances: Tim invested $68,000 out of pocket, secured an $850,000 bank construction loan (5.75% interest, 18 months interest-only, 60-month balloon), and obtained $250,000 in seller financing (3.5% interest, 18 months interest-only, 60-month balloon). The total purchase price was $910,000 with no additional capital raised.

💼 Business Plan: The strategy included comprehensive interior renovations (flooring, cabinets, countertops, paint, appliances) and exterior improvements (paint, landscaping), plus extensive water/sewer and water main line replacements.

🍾 Results: Tim has achieved 110% cash-on-cash returns annually with a 10% return on equity. Rents increased from $525 at purchase to $745 (with full proforma rents projected at $820). The property's most recent valuation is $1.8 million, with renovations continuing on the remaining 10 units to reach an estimated value of $2.2 million.

If you have a deal you'd like us to feature, share it with us!

🎓 EXPERT RESOURCES
FREE DOCUMENT DOWNLOAD

HOW TO COMPENSATE A CRE BROKER

When you decide to list your deal with a CRE broker, the commission is negotiable. However, depending on the size of the deal and if it will be listed on-market or kept off-market, there are general guidelines for the commission structure and amount. This document breaks down the three commission structures you need to know.