These include a cash flowing NOI (Net Operating Income), strong occupancy, reasonable rates of collections, conservative returns, and other factors. One indicator of finding a deal with good value can also be determined by looking at market activity, because of course, one key factor has and will always be location, location, location.
Despite the turbulence of 2020, there were several markets that proved multifamily investing is a resilient and reliable investment vehicle. With the migration of countless renters moving from primary to secondary markets throughout the pandemic, the trend and demands for multifamily housing can’t be better stated than by a recent report by Yardi Matrix in which, “Secondary markets, with $28 billion of transactions, dominated activity, representing 55.6% of all property sales” in 2020. I can personally vouch this is true, as my company Blue Lake Capital, acquired and has been over performing in one of these very secondary markets.
Monitoring transaction activity helps to not only show which markets are increasingly in demand, but also where there is better potential to find promising deal value. Now, this is not to say that if everyone rushes into a market to buy properties, you should do the same. The key is to look closely at the right numbers. Some of the factors to consider when evaluating a market are what is the average price per unit, what is the average rent in the metro area, and how heavy is the demand in the market?
The key to finding deal value is not just finding the cheapest property around, but rather the one with strongest potential, that is in the right location and can be repositioned through better management to increase profits through rent increases and decreased operation costs. This is a classic value-add strategy and why multifamily investing is the “darling child” of many investors.
With this in mind, let’s look at the Top 10 Markets for Multifamily Deal Value:
10. Denver, CO
- Price Per Unit: $247,160
- Total Transaction Volume in 2020: $4,435.8M
- Average Gross Rent: $1,468
- Percentage of Renters in the City: 35.74%
9. Washington, DC
- Price Per Unit: $235,076
- Total Transaction Volume in 2020: $5,468.2M
- Average Gross Rent: $1,708
- Percentage of Renters in the City: 36.48%
8. Miami, FL
- Price Per Unit: $224,266
- Total Transaction Volume in2020: $2,333.2M
- Average Gross Rent: $1,408
- Percentage of Renters in the City: 49.62%
7. Phoenix, AZ
- Price Per Unit: $187,251
- Total Transaction Volume in 2020: $5,879.7M
- Average Gross Rent: $1,188
- Percentage of Renters in the City: 35.45%
6. Austin, TX
- Price Per Unit: $160,872
- Total Transaction Volume in 2020: $2,387.3M
- Average Gross Rent: $1,327
- Percentage of Renters in the City: 42.37%
5. Charlotte, NC
- Price Per Unit: $158,235
- Total Transaction Volume in 2020: $2,959.3M
- Average Gross Rent: $1,077
- Percentage of Renters in the City: 34.57%
4. Tampa, FL
- Price Per Unit: $155,874
- Total Transaction Volume in 2020: $2,518.9M
- Average Gross Rent: $1,160
- Percentage of Renters in the City: 33.27%
3. Atlanta, GA
- Price Per Unit: $142,429
- Total Transaction Volume in 2020: $5,253.5M
- Average Gross Rent: $1,224
- Percentage of Renters in the City: 35.73%
2. Dallas, TX
- Price Per Unit: $128,712
- Total Transaction Volume in 2020: $5,501.8M
- Average Gross Rent: $1,202
- Percentage of Renters in the City: 40.46%
1. Houston, TX
- Price Per Unit: $113,460
- Total Transaction Volume in 2020: $2,328.2M
- Average Gross Rent: $1,139
- Percentage of Renters in the City: 39.92%
Considering these promising trends and renewed market activity, we are keeping busy actively evaluating and touring properties in several of these very markets including Atlanta, Charlotte, Dallas, Austin, Tampa, and more. Though it’s easy to get caught up in the momentum of it all, the key to finding the right deal is remaining pragmatic, data focused, and patient in securing the next high value deal. Stay tuned…there’s exciting opportunity soon to come!
About Ellie Perlman
At Blue Lake Capital, Ellie and her team work exclusively with family offices and accredited investors, offering carefully curated investment opportunities that emphasize long-term wealth creation, stability, and risk-adjusted returns. A defining aspect of Blue Lake’s investment strategy is its integration of advanced AI-driven analytics and data science into the entire lifecycle of acquisitions and asset management. By leveraging cutting-edge technology, the firm executes data-driven forecasting on market trends, asset performance, and tenant behavior, ensuring strategic decision-making and optimized returns.
In addition to leading Blue Lake Capital, Ellie is the original founder and host of "REady2Scale - Real Estate Investing" podcast, which provides insights into multifamily real estate, alternative investments, and finance.
Ellie began her career as a commercial real estate attorney, structuring and negotiating complex transactions for one of Israel’s leading development firms. She later transitioned into property management, overseeing over $100M in assets for Israel’s largest energy company.
Ellie holds a Master’s in Law from Bar-Ilan University in Israel and an MBA from MIT Sloan School of Management.
You can learn more about Blue Lake Capital and Ellie Perlman at www.bluelake-capital.com.
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