Why Now Is a Smart Time to Buy Multifamily Real Estate in 2025
Why Now Is a Smart Time to Buy Multifamily Real Estate in 2025
Introduction
For two years we’ve heard the mantra: “Just survive until ’25.” Now, with the big players publicly shifting their timelines—one saying “we’ll be in heaven in 2027” (Wall Street Journal)—the real-estate cycle is evolving. If you’ve been on the sidelines, this may be your moment. In this post I’m going to show you why now is a smart time to buy multifamily real estate, how to think about the headwinds, and what actionable steps you should take—especially if you’re a veteran or investor over 40 looking to break out of the W-2 rut.
1. Market Snapshot: Where We Stand Now
1.1. Renters Have the Upper Hand
The Waterton CEO David Schwartz recently told the Wall Street Journal: “There was a saying: ‘Stay alive until 2025.’” He added that they now expect the recovery to play out toward 2027. (Wall Street Journal)
This signals three things:
Rent growth will remain muted into 2026.
Concessions (free rent, amenities) will persist.
Valuations are flat to soft in the near term.
1.2. Dry Powder & Less Competition
On the flip side: there’s billions in dry powder—funds waiting to deploy capital. That means: for now, fewer bidding wars and more opportunity for disciplined buyers. You’re not at the peak of a “feeding frenzy” cycle anymore.
1.3. Interest Rates & LTVs Moving
Here’s another important piece: as rates gradually fall, lenders are starting to increase the loan-to-value (LTV) they’ll offer. That signals confidence returning. If a lender is stuck at a 60 % LTV, they’re saying: “I expect risk—and I’m forcing you to carry it.” Higher LTV = more comfort in the economy.
2. Why This Could Be Your Window to Invest
2.1. Less competition = more margin
When the masses are frozen by fear or waiting for “the recovery”, the active buyers get the deals. I’ve underwritten several recently that make sense. Approach that others avoid. That’s how you build returns.
2.2. Veteran Advantage
As a veteran (or someone over 40 making a strategic shift), you bring discipline, mission-focus, and network power. Those traits matter more when the market is uncertain. You don’t need the top of the market to succeed—you need the correct structure, the right partner, and good underwriting.
2.3. Buy when value is reasonable, not risky
Many owners “made it to ’25” —but now are running out of runway, because valuations haven’t rebounded to their original levels. That means motivated sellers, better pricing, less risk of irrational competition.
2.4. Time in Market > Timing the Market
We don’t know exactly when the turn comes—but if you have quality property, in a defendable market, you can win. The key is execution. I’ve managed properties 35+ years; I’ve seen those who fade away in the down-cycle—and those who kill it as the recovery starts. I intend to be in the latter group.
3. Headwinds to Watch
Let’s be real: this isn’t risk-free.
Economic uncertainty — growth could slow, inflation could re-emerge.
Rent growth pressure — with concessions still plentiful, full recovery may be years off.
Rate risk — even if rates come down, they may stay higher longer than many expect.
But here’s the thing: there’s always risk in real estate. The difference is whether you understand them, build guardrails, and act with purpose—not paralysis.
4. A Step-by-Step Action Plan
Here’s how you, especially as a veteran or seasoned professional, can move from “watching” to buying:
Step Action Why it matters
1 Reconnect your network: fellow investors, lenders, brokers. Deals often come from relationships first
2 Underwrite 3–5 deals monthly with assumptions you believe. Practice creates muscle-memory; identify what makes sense for you.
3 Define your guardrails (markets you know, risk profile). Helps avoid “shiny object” syndrome and protects investor capital.
4 Align with a credible sponsor or step into your own deal. Many deals fail due to bad structure—be sure docs are clean.
5 Move when the decision fits your criteria, Waiting for perfection often means waiting not when you’re “waiting for perfect”. forever.
5. Key Underwriting Questions to Ask
What concessions are being offered and why?
What is the break-even occupancy/rent?
What is the lender comfortable with in terms of LTV, DSCR (Debt Service Coverage Ratio)?
What is the exit strategy—5-10 years, hold and refinance, value add?
Are there buried sponsor/syndicator terms that favor them at your expense? (I’ve seen it happen.)
What happens if the recovery dips, or takes longer than expected?
6. Conclusion
Yes, there are headwinds—but the window is open. For veterans and professionals who’ve run the risk-management gauntlet, this is the moment to act. Don’t freeze. Network. Underwrite. Execute. Because the deals that make sense now will reward you when the tide turns.
FAQ Section
Q1: Is now truly a good time to buy multifamily real estate?
Yes. While rents and valuations are under pressure, that creates opportunity. With less competition and motivated sellers, buyers with discipline can win.
Q2: How should I decide on a target market or asset class?
Start with what you know: geography, vintage, asset type. Define clear criteria and stick to assets you understand. Don’t over-stretch.
Q3: What role do interest rates play in deal-making now?
Rates still matter, but even more so is the lender’s comfort (LTV/DSCR). If lenders are increasing LTVs, that’s a market signal.
Q4: As a veteran, what unique advantages do I bring to investing?
Veterans bring mission-focus, team-orientation, discipline, networks. Combined with real-estate strategy, that gives you an edge.
Q5: What are the biggest mistakes to avoid in this cycle?
Chasing hype, neglecting structure, ignoring sponsor terms, skipping your own underwriting. Guardrails matter.
Q6: How long might it take for recovery to happen in properties?
It’s unclear—some speak of 2027 recovery in valuations. Use conservative assumptions and plan for 5–10 years.
Q7: How do I keep from being frozen by uncertainty?
Build systems: network weekly, underwrite regularly, define your criteria, act when alignment occurs. Execution beats hesitation.
