Multi-Family Build-to-Rent
Multi-Family Build-to-Rent
Ground-Up Construction + Rental Holding
- Property Type: Multi-family homes
- Estimated Timeframe: 3 to 5 years, from start to finish
- Investment Strategy: Build → Rent → Sell
- Payout Structure: Quarterly rental income, plus a final lump sum upon sale.
Investing in Build-to-Rent Projects
This unique build-to-rent investment model combines the benefits of a multi-family new development and a multi-family rental into one strategic investment.
Starting with ground-up construction provides significant advantages, including the ability to build equity during development, defer taxes on gains by transitioning into the rental holding phase, and generate passive cash flow from rental income—all while benefiting from property appreciation over time. By building a brand-new property, we maintain full control over the architectural design, allowing us to create spaces that meet demand and appeal to today’s renters. Additionally, building from the ground up enables us to strategically select the best areas to develop, rather than being limited by existing inventory in specific locations.
This carefully structured investment model is designed to maximize investor returns, making it an excellent choice for those looking to build a passive portfolio.
The Benefits of Investing in Multi-Family Build-to-Rent
Maximizing Your Investment Capital
Through our experience and extensive industry connections, Gatsby delivers more value at a lower cost, helping you save money throughout every stage of the process.
- Save on the Purchase Price: Gatsby leverages its large network of agents and brokers to find off-market deals, often at prices much lower than those available to individual buyers.
- Pre-Construction Savings: We secure discounted rates from engineers, architects, and other vendors through long-standing partnerships and negotiated agreements.
- Lending Advantages: Our established relationships with lenders allow us to secure favorable loan terms, reducing borrowing costs and optimizing returns for investors.
- Construction Cost Savings: Because Gatsby builds properties in volume, we can secure volume discounts on materials and labor, significantly reducing overall construction costs.
Multi-Family Build-to-Rent Transformations
The Build-to-Rent Process
Choosing the Right Lot
Selecting the ideal lot and location is essential for the success of any multi-family build-to-rent project. Recent zoning changes have created new opportunities to develop multi-family structures on lots previously designated for single-family use. This not only helps address housing shortages but also presents significant advantages for real estate investors. In many cases, we can acquire a neglected single-family home at a low price point, demolish it, and construct a new multi-family property from the ground up.
Testing Market Feasibility
Each project begins with a thorough market analysis. We identify neighborhoods with the highest demand for multi-family housing and evaluate the property types and styles that perform best in each area. This ensures our developments align with market trends and maximize potential returns.
Sourcing Deals
At Gatsby Investment, we are highly selective, focusing exclusively on deals with the greatest return potential. Our experienced analysts meticulously evaluate countless properties to uncover the most promising opportunities.
Through long-established industry connections, we often secure off-market deals and properties below market value—creating unique opportunities that are typically unavailable to the average investor in a competitive market.
Completing Comprehensive Due Diligence
Every Gatsby project undergoes a comprehensive due diligence process designed to mitigate risk and maximize investor returns. This includes analyzing sales and rental comps in the area to confirm the property’s profitability.
Securing the Property
Once we identify a winning property, we take the necessary steps to secure it. This includes forming the LLC in which the property will be held, arranging any required financing, completing title and escrow documentation, and successfully closing the deal.
Designing the Structure Strategically
Gatsby’s properties stand out in the market because we cater to specific demands. We build larger living spaces to accommodate roommates and growing families—two segments with increasing needs in metro areas like Los Angeles. Shared living arrangements allow renters to split housing costs, making larger units with three to five bedrooms especially attractive. Additionally, families choosing to rent rather than buy require affordable, spacious, and practical homes for their children.
Our architects design modern multi-family structures, tailored to each specific lot and designed to appeal to today’s renters.
With much of Los Angeles’s current apartment inventory limited to one- or two-bedroom units, Gatsby creates a competitive advantage by offering three- to five-bedroom multi-family apartments.
Constructing the Property
The multi-family build begins with preparing the lot for construction. This may involve tearing down a distressed single-family structure to make way for a new multi-family building.
Gatsby oversees every phase of the process, from securing permits and demolition to construction and final finishes. Our skilled construction team ensures that all work meets our high standards of quality and efficiency. Additionally, the volume of Gatsby projects allows us to negotiate favorable deals on labor and materials, reducing costs and maximizing return potential for our investors.
Transitioning to a Rental Asset
When construction is complete, we market the property for rent, screen prospective tenants, and lease up the units to stabilize the property. Once stabilized, we order an appraisal to confirm the property’s new value and refinance the loan to optimize financial performance.
During the rental phase, investors benefit from regular passive cash flow as well as the long-term appreciation of the newly built asset. Best of all, investors don’t need to invest any time or effort into the project to enjoy these benefits. Gatsby’s professional property management team handles all day-to-day operations.
Exiting Through Property Sale
At the end of the rental phase, we market the property for sale and manage the selling and escrow processes to ensure successful project completion.
Investment Timeframe
The multi-family build-to-rent project is an approximately a three to five-year investment.
The development phase of the project typically takes about 18 to 24 months, during which the property is built and stabilized with tenants. Gatsby then holds the property for an estimated three-year rental period before selling.
The decision to sell is based on several factors, including market conditions, interest rates, and buyer demand. Investors are kept informed as we begin the property appraisal process and prepare to list the property for sale.
How to Place and Track an Investment
All investment opportunities are offered directly on the website under the tab “Invest” when clicking “View all investments.”
You can click on an investment project to view detailed information about each specific deal, including the property address, financial breakdown, estimated timeframe, investment strategy, area comps, and photos of the property. There is also an ROI calculator feature available for each project which states the minimum and maximum investment available. The calculator also allows you to enter an investment amount and view your estimated target share in the property and estimated return.
Placing an investment is easy! You will be guided step-by-step to finalize your investment request on the website. After placing your investment, you’ll receive wire transfer and ACH instructions. You will then have five business days to send the funds and secure your place in the investment.
Once the project is active, you can track your investment from start to finish through the user-friendly online dashboard. You’ll see the project’s progress bar as well as progress photos of the new construction. We also send email updates when the project moves from one status to another.
You can also track your scheduled rental payouts under the “Account” tab, where you’ll find “Statements.”
When the property is eventually sold, you will receive your disbursements via wire transfer. After receiving the funds, you can enjoy your proceeds or look for new investment opportunities to continue to grow!