Monthly Newsletter: Reallocation strategies to reduce portfolio volatility

Message From the CEO

The rapid speed at which the Federal Reserve is raising interest rates is upending the investment world. Not only have they increased rates at each meeting for the last six months, but the last three have been mega boosts of 0.75%. Since March 2022, mortgage rates have more than doubled, and the S&P 500 saw losses of -20.85%.

Many investors are scrambling to identify holdings that will stabilize their portfolios through reduced volatility and steady dividend-like returns. While multifamily real estate syndications fit the bill, there is still some confusion about how to reallocate market investments for this safer option.

A few avenues include a Self-directed IRA, Solo 401k, or business partnership. You might also qualify to redirect funds currently invested in real estate into a multifamily syndication through a 1031 exchange. Each option lets you move existing funds into a multifamily housing project without losing the tax benefits.

Self-directed IRAs permit using IRA, 401K, and other retirement dollars for alternative investments, including real estate. Businesses without employees (even part-time gigs) often qualify for a Solo 401k. These accounts could increase the amount you can set aside in tax-advantaged retirement accounts while giving you more flexibility in your investment choices. Business partnerships allow you to pool money with business partners increasing the resources available for large multifamily investing.

High inflation and recessions play havoc on stock market investments. Multifamily housing provides distinct advantages that make it less susceptible to volatility and can be an effective hedge against inflation and recessionary conditions.

This month we focused our educational articles on the current market uncertainty through the lens of multifamily housing. We discuss inflation’s impact on real estate and rent rates, the impact of rising interest rates on demand for apartment housing, and economic conditions affecting demand for multifamily housing units.

Jeff McKee



Inflation’s Impact on Real Estate Investing
Do stock market losses have you looking for safety? Are you concerned that 2023 will be another challenging year for the markets? Alternative investments like real estate could protect your portfolio from losses and provide a hedge against inflation. Learn More.

How Rising Mortgage Rates Affect Demand for Apartment Housing
The news of a declining real estate market may create anxiety about investing in real estate syndications. However, homebuyer challenges due to rising mortgage rates do not impact multifamily housing the same way. Our latest article explores what factors influence mortgage rates and how these circumstances affect demand for apartment housing. Learn More.

Inflationand Its Impact on Rent Rates
Rising interest rates are a concern, whether you currently own real estate investments or want to consider adding them to your portfolio. Our latest blog post examines inflation’s impact on multifamily housing. Learn More

How Interest Rates & The Economy Impact Demand for Multifamily Housing
Another rate increase by the Federal Reserve could have you wondering whether it is time to pull back on real estate investments. While rising rates negatively impact homebuying, it does not always affect multifamily housing the same way. Our latest post discusses how these evolving economic conditions influence multifamily investments. Learn More

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