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5mo

🌩️ The stormy question on multifamily: navigating suspended distributions. But what you may not realize is that more often than not, doing so with transparency is a key strategy to preserve long-term capital on a project. 🌟 Key Takeaways on Multifamily Suspended Distributions 🌟 ✅ Understanding the Reasons: Know why distributions are suspended (economic downturns, operational issues, strategic decisions) to assess potential impacts. ✅ Assessing Impact and Risks: Evaluate how the suspension affects your portfolio and financial goals, including the sponsor's financial health and the likelihood of distributions resuming. ✅ Diversification and Risk Management: Mitigate risks by diversifying investments across sponsors, asset classes, and strategies, and having a robust risk management plan. Transparency is key to preserving long-term capital and navigating these challenges effectively. Listen to the full episode today: https://lnkd.in/gFBKpd6z #passiveinvesting #passiveincome #buildingwealth #multifamilyinvestor #investing #realestateinvestor #propertyinvestment #investmentopportunity #investmenttips

Transcript

Because those distributions should be coming from the properties cash flows and at the sponsors choosing to supplement the cash flows in lieu of kind of bolstering the properties operations. It may make more sense to say, hey, we're gonna pause distributions that really focus on getting the property back up to where it needs to be, especially with kind of the variable rate debt that you mentioned. With how fast debt has risen over the past year or so, it's really tough to kind of claw that back with just operations. Even if you operate the property perfectly, you can't really react for extra income in a matter of a couple months to kind of offset that rise in debt. Yeah, and there's a huge problem with softening of the. Market as well. There are many markets out there where the rents were being pushed, push, push and then the tenants at this point I've been pushing back considerably and you're not getting those higher rents. Rents are dropping.

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Viking Capital

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