Evaluating Risk Management in Multifamily Investing

Risk Management in Multifamily Investing

Hello readers, Myles Spetsios here, and today I want to talk about an essential aspect of investing in an apartment complex: proper risk management.

Investing in an apartment complex can be a great way to generate cash flow, long-term capital gains, and take advantage of tax benefits. However, like any investment, it also comes with risks. Proper risk management is critical to ensure that the investment remains profitable over time.

One of the most important things you can do to manage risk when investing in an apartment complex is to conduct thorough due diligence. This includes researching the local market, analyzing the financials of the property, and thoroughly inspecting the property before making a purchase. This will help you to identify potential risks and make an informed decision about whether or not to invest.

Another important aspect of risk management is diversification. Diversifying your portfolio by investing in multiple properties, or by investing in different types of properties, can help to spread risk and reduce the impact of any one investment on your overall portfolio.

Another aspect of risk management is having a well-defined exit strategy. This means having a plan for what to do if the investment doesn’t perform as expected. This could include selling the property, renovating and renting it out again or even converting it into a different type of property.

Having a good team of professionals such as the JCORE Team, attorneys, and accountants can also help to manage risk. They can provide valuable insights, advice and support throughout the investment process.

In conclusion, investing in an apartment complex can be a great way to generate cash flow, long term capital gains, and take advantage of tax benefits. However, like any investment, it also comes with risks. Proper risk management is critical to ensure that the investment remains profitable over time. This includes conducting thorough due diligence, diversifying your portfolio, having a well-defined exit strategy and having a good team of professionals.

Hope this helps and happy investing!

Myles Spetsios – JCORE

P.S. If you want to learn more about what we do, check out the JCORE Investor Club Link Below!

Economic Conditions and Your Investment Choices

How Do Economic Conditions Impact Your Multifamily Investment Choices?

Hello readers, Myles Spetsios here, and today I want to talk about a factor that can have a significant impact on the profitability of a real estate investment: economic conditions.

Economic conditions refer to the overall state of the economy, including factors such as unemployment, inflation, and interest rates. These factors can have a direct impact on the performance of a real estate investment, particularly in the case of rental properties like apartment complexes.

For example, when the economy is strong and unemployment is low, demand for rental properties tends to be high. This can lead to higher rental income, which in turn can lead to higher cash flow and higher appreciation. On the other hand, when the economy is weak and unemployment is high, demand for rental properties tends to be low. This can lead to lower rental income, which in turn can lead to lower cash flow and lower appreciation.

Interest rates can also have a significant impact on the profitability of a real estate investment. When interest rates are low, it’s generally easier for investors to secure financing, which can make it easier to purchase properties and can also lower the overall cost of borrowing. On the other hand, when interest rates are high, it’s generally more difficult for investors to secure financing and the overall cost of borrowing is higher.

Inflation can also have an impact on the profitability of a real estate investment, as it can affect the value of rental income and appreciation. Inflation can also affect the cost of maintaining the property and the overall cost of doing business.

Economic conditions are constantly changing, and it’s always a good idea to keep an eye on the current and future economic conditions when evaluating a real estate investment. It’s also a good idea to diversify your investments and have a plan for managing the risks associated with economic conditions.

In conclusion, economic conditions can have a significant impact on the profitability of a real estate investment, particularly in the case of rental properties like apartment complexes. Factors such as unemployment, inflation, and interest rates can affect demand for rental properties, rental income, cash flow, and appreciation. It’s important to keep an eye on current and future economic conditions when evaluating a real estate investment and to have a plan for managing the risks associated with economic conditions.

Hope this helps and happy investing!

Myles Spetsios – JCORE

P.S. If you want to learn more about what we do, check out the JCORE Investor Club Link Below!

Evaluating A Good Multifamily Investment Deal

Real Estate Investment: What makes for a good deal and what to look for?

Real estate investment can be a lucrative opportunity, but it’s important to understand the key players involved and the factors that can impact the success of the investment. This article will discuss the role of sponsors in real estate investments and key considerations for evaluating market areas. That’s what JCORE is here for! To help you understand and be able to apply that knowledge when considering investment opportunities. 

What is a Sponsor in Real Estate Investment?

In real estate, a sponsor is a person or company that provides the capital for a real estate investment, such as a real estate investment trust (REIT) or private equity fund. The sponsor plays a critical role in the investment process, as they are responsible for acquiring, renovating, and managing the property. They also make decisions about the investment on behalf of the investors. To this end JCORE has an experienced team whose entire goal is to make the entire process seamless and easy for our investors to benefit from.

In exchange for their investment and expertise, sponsors typically receive a portion of the profits generated by the real estate investment. This can make sponsors an attractive option for investors who lack the expertise or resources to manage a real estate investment on their own. On each and every investment deal we provide a detailed description of the profit breakdown, so our investors can always be informed!  

Evaluating Market Areas for Real Estate Investments

When evaluating a potential real estate investment, it’s important to consider the market area in which the property is located. There are several key factors to consider, including:

  1. Demographic Trends: Population growth, median income, and education levels can indicate demand for housing and potential renters or buyers.
  2. Economic Indicators: Consider the local job market and economic growth, as a strong local economy can drive demand for housing and support property values.
  3. Real Estate Market Conditions: Analyze local home sales data, including average sale prices and the number of homes sold. This will give you a sense of the current demand and supply in the market.
  4. Location: Proximity to schools, shopping, public transportation, and other amenities can make the property more attractive to potential renters or buyers.
  5. Competition: Research the other properties in the area, including the types of properties, their prices, and the quality of their amenities.
  6. Zoning and Land Use Regulations: Understand the local regulations regarding land use, zoning, and building codes. These regulations can affect the property’s future value and potential for redevelopment.

We at JCORE always consult with our Brokers and do our due diligence to get a more comprehensive understanding of the market area. This helps ensure that we make informed decisions about every potential investment. We are of the belief that knowledge is power, and when it comes to investing you can never have too much knowledge! 


Real estate investment can be a lucrative opportunity, but it’s important to understand the key players involved and the factors that can impact the success of the investment. JCORE is here to provide valuable investment capital and expertise, but more than that we are here to provide the tools and information to investors considering making a successful real estate investment. By considering demographic trends, economic indicators, real estate market conditions, location, competition, and zoning and land use regulations, you can make informed decisions about your real estate investment.

Hope this helps and happy investing!

Myles Spetsios – JCORE

P.S. If you want to learn more about what we do, check out the JCORE Investor Club Link Below!

In Multifamily Investing What Does "CAP Rate" mean?

What is a CAP Rate?

Hello readers! I am Myles Spetsios from the JCORE team. I want to talk about how the capitalization rate (or “cap rate”) can affect the sales price of an apartment complex.

First, let’s define what the cap rate is. The cap rate is a metric used to determine the value of an income-producing property, such as an apartment complex. It is calculated by dividing the property’s net operating income by its purchase price or current market value.

When it comes to apartment complexes, the cap rate is a key factor in determining the value of the property. A high cap rate means that the property is generating a higher cash on cash return on investment, and therefore the income stream is considered less valuable. On the other hand, a low cap rate means that the property is not generating as much income per purchase price and therefore the income stream is considered more valuable.  This generally means high cap rate properties have higher risks associated with them (but not always).

So, how does this affect the sales price of an apartment complex? Simply put, a property with a high cap rate will generally command a lower sales price than a property with a low cap rate. This is because investors and buyers are looking for properties that will generate a good return to risk ration on their investment.

However, it’s important to note that the cap rate is just one factor that can affect the sales price of an apartment complex. Other factors such as location, condition of the property, and the current state of the real estate market can also have a significant impact.

That being said, it’s important for investors and buyers to take into consideration the cap rate when evaluating an apartment complex for purchase. A high cap rate can indicate a higher risk investment opportunity and may be a red flag, while a low cap rate may indicate a more stable investment.

In conclusion, the capitalization rate can have a significant impact on the sales price of an apartment complex, but it’s just one of the many factors that buyers and investors should take into consideration when evaluating a property.

Hope this helps and happy investing!

Myles Spetsios – JCORE

P.S. If you want to learn more about what we do, check out the JCORE Investor Club Link Below!

What We Are Thankful For in 2022

What the JCORE Team is Thankful for in 2022.

Teams are central to accomplishing your goals, and this is no different in real estate.  The JCORE team has been working together for the past few years and as we reflect on 2022, we wanted to share a few things we are thankful for this season. 

Tom Groves

This year, I am thankful for so much growth professionally and personally.  My daughter got engaged in September, my wife and I have attended the Pay it Forward conference in Denver (we’re looking forward to the next one), and our team has bought and sold properties in Texas and Pennsylvania.  I thank God for such an amazing opportunity to work with JCORE and and great people across our country!

Noel Walton

This year, I am thankful for, The support of my family, the abundance of amazing relationships I’ve made in this business and the ability to make a difference in the lives of Veterans along the way.

James May

This year, I am thankful for my family and the great year we had together. We are really enjoying being back in the U.S and starting a new life here in Florida

Myles Spetsios

This year, I am thankful for my wife who works hard as an interventionist teacher and is a great life partner. I’m thankful for my in-laws and nieces who had us over for Thanksgiving and cooked a wonderful meal. I’m thankful for my job that allows me the honor to serve my country 

I’m thankful for my dogs that are super adorable and always brighten my day

Joey Arora

This year, I am thankful for the opportunity to work on financial freedom with a great team of fellow veterans. The chance to grow and work together in a virtual environment has been a joy in my life. I have enjoyed working in the commercial space and the chance to visit India with my family this year. 

We also want to give a thank you to all the investors who have trusted us with their capital in 2022. This journey happens because of you! To join our investor club visit: https://join.jcoreinvestments.com/investorclub

-Thank you from the JCORE Team!


Want to Learn more about JCORE:

We have created a system for you to invest directly into cash-flowing, hard assets that don’t require you to manage tenants or deal with any of the headaches that come from owning Single Family Homes. This gives you the freedom to use your time as you wish while we grow your wealth through these amazing assets! 

If you are looking to secure your financial future, we would love to connect with you and explore partnership opportunities! 

To Learn More about the many benefits of investing in Multifamily Apartments, Download our Free Passive Investor Guide today!

You can set up a complimentary discovery call to join our investor network with one of our team members here!


10 Reasons to Invest in Multifamily


1. Attractive, Risk-Adjusted Returns and Relatively Low Volatility

Multifamily is less impacted by cyclical downturns than  other property types. It was the first sector to recover from the 2008 recession and has achieved superior returns through the recovery and expansion phases. The 2010-2016 average return was 12.1%, based on data from the National Council of Real Estate Investment Fiduciaries (NCREIF). In 2016 and 2017, the annual investment returns reflect the maturity of the sector, yet the income components remain healthy at 4.5%.


Over the past 25 years, multifamily investment has had the highest average returns of any commercial real estate asset class. The 9.8% average annual return is slightly ahead of industrial, and more than 100 basis points greater than office.

Multifamily can be considered a “defensive play”. Using standard deviation as a measure of volatility over the 25-year period, retail and multifamily had the lowest levels of volatility in return performance.

Demand for multifamily housing has been robust in the past several years. From mid-2012 through Q2 2017, net absorption—the measure of demand—totaled 948,445 units or about 189,689 per year (based on the 62 major markets tracked by CBRE Econometric Advisors). This total represents a healthy 7.3% increase to total multifamily demand over the five-year period. The high level of demand is due to a combination of cyclical and secular trends.

The U.S. has a relatively landlord-friendly regulatory environment. While many governmental regulations exist, especially at the local and state level that protect apartment renters’ health, safety and tenure rights, most multifamily properties are owned and operated without restrictions on rents. There are some exceptions, including metros with rent control (principally city laws limiting rent increases). New York City is one of these metros, and the laws can be complicated. In cities where there are no rent controls, market dynamics and operator skill dictate rents.

With respect to “social” housing, the U.S. has a lower level of subsidized/low-income inventory than many other countries. These properties require additional expertise on the regulatory environment, but represent only a small portion of the total inventory (estimated 5% to 10%).

Transparency in the commercial real estate industry, including multifamily, has been rising steadily over the past few decades, and the U.S. has one of the more transparent markets in the world. This transparency allows investors to understand pricing, market conditions, development activity, property ownership trends and other key elements of the industry with relative ease.

Many professional associations, such as the NMHC and National Apartment Association (NAA), regularly host conferences and events with experts discussing key trends  and risks in the industry. Industry groups with a broader spectrum, such as the Urban Land Institute, Pension Real Estate Association and Mortgage Bankers Association (MBA), also host educational and networking events, publish news briefs and trends reports, produce podcasts and webinars, and speak with media.

Public information sources such as the U.S Census Bureau and local and state governmental agencies regularly produce housing, demographic and socio-economic  statistics that provide insight into demand drivers. CBRE is the world’s largest commercial real estate services and  investment firm and provides research and data analysis on multifamily trends, property types, specific properties, market statistics, sales transactions and more.


U.S. multifamily assets have a high degree of liquidity (generally defined as the ability to sell or finance assets at the seller’s chosen timing). While there is no good single measure of liquidity, investment volumes provide some sense of liquidity in the marketplace.

The multifamily sector represented more than $1 trillion or 27% of all commercial real estate sales based on the dollar value of all sales over the past 16 years. Over the recovery and expansion years of the current real estate cycle (2010- 2016), investment in multifamily assets totaled $680 billion or 29% of all real estate investment, slightly below office at $700 billion. Multifamily also represented a larger market share in this period than in the 2001-2009 period where the sector attracted 24% of all investment.

One of the principal factors behind the multifamily sector’s high degree of liquidity is the large and diverse pool of investors. Not only is this broad-based capital attracted to primary markets, it is also interested in secondary and tertiary markets. For example, in 2016, the top-10 metropolitan areas for multifamily investment were Dallas/ Ft. Worth, Atlanta, Denver, Miami, Seattle, Phoenix, New York, Los Angeles, San Francisco and Washington, D.C. Another way to consider liquidity is to review the ranges of capitalization rates. Lower and less volatile cap rates suggest greater liquidity, as does a smaller cap rate range between the peaks and troughs of the cycles. From 2004 through Q2 2017, cap rates for multifamily acquisitions averaged 6.3%—nearly a point lower than the  office-industrial-retail average, according to RCA. Cap rates can vary significantly by asset class.


Loan terms, leverage and pricing are more favorable for multifamily than other property types. The availability of  debt capital is important for investment in any commercial  real estate sector. Leverage is used for most transactions, with acquisition financing usually in the 50%-to-75% loan- to-value (LTV) range.

The largest sources of capital for financing acquisitions of  all property types in the U.S. are banks, life insurance companies and CMBS or conduit lenders. The multifamily  sector also benefits from U.S. government-backed lending programs not available for other property sectors.  specifically, Fannie Mae, Freddie Mac and the Federal Housing Administration are major sources of debt capital for existing assets. Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs) because they are backed by the U.S. government.

The GSE share of multifamily mortgages has risen  dramatically over the past two decades, and the availability of capital from Fannie Mae and Freddie Mac provides a unique financing advantage. These capital sources increase investment and financing liquidity—important during economic downturns—and help the multifamily sector sustain premium pricing.

Multifamily’s strong market performance, active investment arena and the availability of agency GSE for financing acquisitions and refinancing assets (during both favorable and unfavorable phases of the market) have contributed to the sector’s ability to obtain more favorable loan pricing and terms than other property types. Current loan underwriting metrics reflect the preferential loan underwriting characteristics that multifamily mortgages received in Q2 2017 compared with other major property types.

Multifamily borrowers have obtained higher LTV ratios and lower debt-service-coverage ratios. The average mortgage rate was lower than all other property types combined by 30 bps. Multifamily’s preferential treatment is not limited to 2017. Historically, multifamily debt capital has been more favorably priced than other commercial property assets.


In commercial real estate, there is always risk that leases will not be renewed or easily back-filled when space is vacated. In addition to revenue loss from vacancies, there are costs to release and physically prepare available space for new tenants. Multifamily shares this risk in the aggregate, but the sector is very different in that each individual lease only represents a very small portion of overall income of the asset.

Because multifamily assets have a large volume of leases, it also means that credit is well diversified across many leases and lease holders. Diversified credit mitigates risk and gives the sector a distinct advantage over office, industrial and retail assets, each with much smaller numbers of tenants.


Short-term leases—typically one year vs. five or more years for office, industrial and retail—means that leasing activity is a constant part of multifamily operations. Short-term leases and the steady leasing/renewal activity provide a financial cushion for operations which generally results in higher occupancy. In other sectors, the loss of an individual tenant can seriously disrupt cash flow and create more risk for owners.
The short-term lease structure, relative to other property types, provides an advantage with respect to both market conditions and inflation. In periods of high rent growth, the short-term leases provide owners the ability to adjust rents upward quickly. More importantly, if the U.S. moves into a period of higher inflation, short-term leases provide  owners with the ability to make upward adjustments to  over the increased costs of operations.


Multifamily investments tend to provide elevated net cashflow. While multifamily properties require ongoing maintenance and, occasionally, major capital improvements, the amount of capital expenditures (“cap ex”) needed to maintain them is typically lower than the cap ex investment required for other commercial real estate assets.

Similarly, apartment unit turnover requires only minimal investment in contrast to what can be unpredictable and significant tenant improvement expenses needed to attract and retain office, industrial or retail tenants. Annual unit turnover costs are predictable within a tight range and do not result in dramatic swings in cash flows for multifamily owners and investors.


In the U.S., it is common to outsource property management and leasing for all types of commercial real estate, including multifamily assets. Management and leasing are almost always handled by the same organization in the multifamily sector.

The NMHC reported that the 50 largest multifamily management companies in the U.S. managed 3.2 million units. Many management companies also own assets, and these units are included in the count. The largest 50 firms each managed at least 30,000 units; the top five are each responsible for more than 100,000 units. Additionally, many of the larger firms have a broad geographic coverage and operate in all or most major metropolitan areas across the U.S.

Revenue management systems are used by nearly all major management companies. These sophisticated software programs are like those used in the airline and travel industries and help determine optimal rent pricing based on market conditions, property occupancy, availability of units by size and other market and property-level criteria. Revenue management systems greatly assist in obtaining the best pricing for new leases and renewals, enhancing revenue for the owner.