Multi Family Is Dead!

 The sentiment is everywhere these days. At conferences, in investment forums, across social media “Multifamily is dead.”

You’ve heard the complaints:

• “Cap rates are compressed beyond reason”
• “Interest rates have killed cash flow”
• “Transaction volume has fallen off a cliff”
• “I can’t find a deal that pencils”
• “The big institutions have bought everything worth owning”

As someone who’s been in the multifamily investment space since 1996 (29 years), I understand the frustration. I’ve watched as once-reliable formulas for success have seemingly stopped working. Properties that would have been no-brainer acquisitions just a few years ago now look like guaranteed ways to lose money.

The Grim Reality (Or So They Say)

The numbers tell a stark story. Multifamily transaction volume dropped nearly 75% from its peak. Deals that once attracted 30+ offers now struggle to find 5 serious bidders (the survivors of the 2022 culming of inexperienced investors).

Cap rates that had compressed to historic lows are now trying to expand in a financing environment that makes positive leverage almost impossible to achieve.

Sellers remain anchored to 2021 valuations while buyers need 2019 prices to make deals work. This standoff has created a market where properties sit unsold for months, sometimes years.

Add to this the rising construction costs, supply chain issues, and increasingly complex regulatory environments in many municipalities, and you have a recipe for what many are calling the death of multifamily investing.

But Wait… Is That Really the Whole Story?

While scrolling through my deal flow last week, something caught my attention. Among the “dead deals” and overpriced offerings were properties that, upon closer inspection, actually presented viable opportunities.

Not plentiful, not obvious, but definitely there.

Which led me to a realization: Multifamily isn’t dead. It’s simply in transition.

And transitions, while uncomfortable, create the greatest opportunities for those willing to adapt.

The Deals Are Still There (They’re Just Not Being Advertised)

Here’s what the doomsayers aren’t telling you: Transactions ARE happening. They’re just not happening the way they used to.

The best deals today aren’t hitting the broad market. They’re being traded quietly through established relationships between brokers and investors who have demonstrated they can close in challenging environments.

I recently spoke with a broker who told me, “For every deal I put on the market, I have two I’m working off-market with investors I trust.”

These relationship-driven transactions are flying under the radar, creating the illusion that nothing is happening when in reality, the market has simply become more selective about participants.

Now Is When Fortunes Are Made

Real estate has always been cyclical. The investors who truly build wealth aren’t those who pile in during the boom times — they’re the ones who position themselves during transitions to capitalize on the inevitable upswing.

Consider this: Every significant downturn in multifamily has been followed by an even more significant upturn.

Those who used the “dead” periods to build their infrastructure, relationships, and capital reserves were the ones who reaped the greatest rewards when the market recovered.

So instead of lamenting the death of multifamily, here’s what smart investors are doing right now:

1. Building Broker Relationships That Matter

In today’s environment, having casual relationships with dozens of brokers won’t cut it. You need deep, trust-based relationships with a select few who know you can perform. This means:

• Following through on what you say you’ll do
• Providing quick, decisive feedback on deals
• Being transparent about your criteria and capital
• Adding value to brokers beyond just being a potential buyer

2. Strengthening Your Capital Stack

The best opportunities often come to those with ready capital. Now is the time to:

• Shore up existing investor relationships
• Develop relationships with debt brokers and lenders
• Create contingency financing plans for different scenarios
• Consider alternative financing structures that might work in today’s environment

3. Building the Right Team

When the market accelerates again, you won’t have time to build a team from scratch. Use this period to:

• Identify and build relationships with property management companies
• Develop connections with contractors and vendors
• Create systems and processes that can scale
• Bring on key team members who can help you move quickly when opportunities arise

4. Refining Your Investment Thesis

The strategies that worked in 2015–2021 may not work in 2025 and beyond. Smart investors are:

• Analyzing which submarkets have proven resilient
• Identifying emerging demand drivers
• Developing new value-add strategies that work in today’s environment
• Creating multiple acquisition approaches to adapt to changing conditions

The New Multifamily Paradigm

Here’s my prediction: We’re not witnessing the death of multifamily — we’re witnessing its evolution.

The easy money period is over, but the fundamentally sound investment thesis remains.

People will always need housing. Demographics continue to favor rental demand. New construction hasn’t kept pace with household formation. And inflation, while moderating, continues to drive replacement costs higher, creating a floor for well-maintained existing assets.

What’s changing is who succeeds in this space. The tourists — those who jumped into multifamily because it seemed like easy money — are leaving.

What remains are the professionals, the relationship-builders, the systems-thinkers, and the patient capital.

Conclusion: Double Down or Walk Away

So is multifamily dead? Only for those unwilling to adapt to the new reality.

For those willing to embrace the transition, build meaningful relationships, and position themselves for the next cycle, multifamily isn’t just alive — it’s poised to create a new generation of wealth.

The question isn’t whether multifamily is dead. The question is whether you’ll be ready when it roars back to life.

What are you doing today to prepare for tomorrow’s opportunities?

To you Success,

Dave Lindahl