For the past two years, I’ve heard the same pitch repeated across the multifamily investing world as it relates to the opportunity today: values are down 20–30% from peak, 2021–22 buyers will become forced sellers, the wave of maturities can’t be refinanced, supply is falling off a cliff, new development doesn’t pencil, renter demand is holding strong, and renters aren’t leaving as single-family housing is historically unaffordable.

On paper, it reads like a once-in-a-decade buying opportunity. And in broad strokes, it’s true. But the reality is more nuanced, and the path from “thesis” to “actionable deal” is far less straightforward than many would like to admit.

A Real-World Example: Well-Located Value-Add Opportunity

Recently, I worked on a potential acquisition in great location that seemed like the perfect embodiment of the opportunity everyone is talking about. It checked five of our six core acquisition criteria:

• A motivated, forced seller.
• Inside information through the property manager.
• Conviction in the submarket.
• An unusual unit mix & some physical issues that we believed would reduce the buyer pool.
• A highly supportable business plan.

This deal had all the hallmarks of a compelling acquisition.

We pushed our underwriting aggressively, stretched our assumptions, and still came in as the lowest priced of the six groups invited to best & final.

The Gap Between Narrative and Execution

That experience highlights what’s not being told in multifamily circles today. Yes, distress is real. Yes, the discount to replacement cost dynamic is attractive. Yes, demand tailwinds remain. But when everyone is chasing the same story, competition tightens, and pricing reflects it.

In practice, many of these supposedly “once in a cycle” deals just don’t pencil. Buyers often find themselves in the same spot we did: seeing the opportunity clearly, but discovering that other well-capitalized buyers are chasing the exact same thing, and bidding more aggressively to win.

Screening for Opportunities

Our screening checklist is built to filter out noise and identify the rare deals that meet our criteria: newer, high-quality, well-located assets with a supportable business plan, but which also have a limited buyer pool and/or tight fuse, giving us a path to win at pricing that supports value-add returns.

What we look for today:

1. Forced/Motivated Seller
2. Relationships across broker, seller, lender, management company etc.
3. Conviction in the Submarket
4. Supportable Business Plan
5. Contrarian View
6. Creativity/Complexities

This deal checked five of six. Yet despite that, we were blown out of the water. The “who’s who” of buyers pursued it, and it ultimately got tied up at ~5% above broker guidance. That’s the market we’re competing in.

Why the Best Deals Are So Competitive

Despite the headwinds and uncertainly, there are a few dynamics driving heightened competition:

• Flight to Quality: Owner/operators are concentrating on the highest-quality, best-located assets.
• Optimism: Investors are optimistic by nature. All the rosy assumptions present in today’s market are baked into underwriting.
• Capital Pressure: Allocators with large pools of capital are motivated, and increasingly impatient, to deploy.

Large buyers are all chasing the same finite set of high-quality deals. They’re underwriting into the same story: near-term rate cuts, sustained capital flows (supporting compressed cap rates), limited new supply, and resilient demand.

As a result, going-in cap rates are often sub-5%, negative leverage can persist for 12–24 months and hitting even base-case returns requires a lot to go right.

Why the Bet Still Makes Sense

Despite the aggressive pricing, buying well-located assets with proven value-add upside at a discount to replacement cost remains a strong long-term bet. Inherent in this thesis are a few beliefs:

• Rent Growth: Softer than expected over the next 12–18 months, followed by above-trend growth in years 2–5, driving outsized CAGRs over a 5–7-year hold.
• Cap Rates: Continued tightness and potential further compression as capital flows into high-quality multifamily in the Southeast. A 5.25% underwritten exit could realistically be a 4.75%, outweighing near-term underperformance.
• Construction Costs: Rising further, reinforcing barriers to future new supply.

Yes, it feels like overpaying today and sub-5% caps and negative leverage are hard to swallow. But paying up for conviction in the best deals capturing a disproportionate percentage of new demand, with clear downside protection and long-term upside, is defensible.

How We Differentiate Ourselves in Competitive Deals

When we find an opportunity that checks all the boxes, we commit fully and lean into the things few others are unwilling, or unable, to do.

• Immediate Action: We drop everything, tour the property, and spend meaningful time in the market.
• Selective Risk-Taking: We’re prepared, when conviction is high, to put down a non-refundable deposit.
• Depth of Work: We consistently outwork other buyers, digging deeper into the deal, the submarket, and the business plan than anyone else at the table is able or willing to do.

I’ll end with wisdom from Howard Marks, who knows a thing or two about cycles:

“Because of the key role psychology plays in setting asset prices, in order to have a sense for where price stands relative to value, investors should try to gauge prevailing psychology, not just quantitative valuation parameters.”

So the question is: what does prevailing psychology tell us about the pricing of high-quality multifamily assets today?