Multi-Family Build-to-Rent image

Multi-Family Build-to-Rent

Multi-Family Build-to-Rent

Ground-Up Construction + Rental Holding

  • Multi-family homes
  • 3–4 years
  • Tax benefits
  • Build and rent

Investing in Multi-Family Build-to-Rent Projects

This unique build-to-rent investment model from Gatsby Investment provides the benefits of both a new multi-family development and a multi-family rental in one investment!

By investing in the project pre-build, you get to build equity in the property, then defer taxes on those gains by continuing your investment into the rental holding phase. And then you get to generate passive cash flow from the rental income, as well as benefit from property appreciation over time.

Beginning with new construction offers multiple advantages over buying an existing multi-family rental. We have control over the architecture and design, allowing us to create spaces that will appeal to today’s renters. And, by building from the ground up, we create instant additional value and build equity in the property before moving into the rental phase.

This well-designed investment model has been created to maximize our investors’ ROI. And this is a great option for investors looking to build a passive, long-term portfolio.

The Benefits of Investing in Multi-Family Build-to-Rent

Unique Investment Model.
This model combines the benefits of new multi-family development plus the benefits of multi-family rentals. You get passive cash flow, property appreciation, tax benefits, and maximized returns. Rentals also provide additional tax benefits; since the property is held long-term, your income is taxed at the lower long-term capital gains rates rather than as earned income.
Passive Investment.
You won’t need to analyze properties, secure financing, oversee construction, find renters, or collect rents. Gatsby’s experienced team of well-qualified professionals will handle every detail of the acquisition, build, and ongoing rental management for you. You get to leverage our skills and knowledge to maximize your ROI.
Cash Flow.
Quarterly disbursements from rental income. Tenants pay monthly rent to help cover property expenses and can provide ongoing profit to investors.
Possible Cash-Out Refinancing.
Gatsby will review the mortgage loan once the construction phase is complete and determine if current interest rates and property appreciation warrant refinancing. If a cash-out refinance makes financial sense, we can pull equity out of the deal to disburse back to investors.

Multi-Family Build-to-Rent Transformations


The Process of Multi-Family Build-to-Rent Investing

Choosing the Right Lot

At Gatsby Investment, we only accept the deals with the greatest return potential. Our real estate analysts are highly selective when looking for a deal. We review dozens of properties to find a single property to pursue.

Choosing the right lot and location is key to the success of a multi-family build-to-rent project. Recent zoning changes have made it possible to build multi-family structures on certain lots that were once zoned as single-family. Not only does this help alleviate the strains of the housing shortage, but it also provides an exceptional opportunity for real estate investors. In many cases, we are able to buy a comparatively low-cost single-family home, tear it down, and then build a multi-family property from the ground up.

With heavy buyer competition, Gatsby relies on long-established industry connections to find deals that the average investor may not have access to. We work with hundreds of local real estate brokers, and we often find off-market deals that can be acquired below market value.

Every Gatsby project goes through a comprehensive due diligence process, designed to mitigate any risk and maximize investor returns.

Securing the Property

When our real estate experts are satisfied that we have a winning property for our investors, we open the LLC in which the property will be held, secure any financing needed, complete all title and escrow documents, and successfully close the deal.

Designing the Property

Our architects create modern multi-family structures, tailored to the specific lot and designed to appeal to today’s renters.

The standard multi-family build starts by preparing the lot for the new construction. In many cases, a distressed single-family structure is torn down to make way for the new multi-family structure.

Gatsby’s properties are unique in that we often build large living spaces to meet market demand for roommate situations and growing families who choose to rent. Co-living with multiple roommates has become popular in high-priced metro areas like Los Angeles. By living with more roommates, renters can split the rent among more people to make housing more affordable. This has created additional demand for rental units with more than two bedrooms. We’re also seeing increased demand for larger units from families who are renting rather than buying. These families need affordable, spacious, and practical living spaces that can accommodate multiple children. Since most of the current apartment inventory in Los Angeles has only one or two bedrooms, Gatsby has found a competitive advantage in creating multi-family apartments with three to five bedrooms per unit.

Gatsby has also found an additional advantage in offering Section 8 housing developments. Demand for affordable units in LA is higher than ever, and the Section 8 program allows property owners to assist low-income families, veterans, senior citizens, and differently-abled residents in accessing safe housing. In this case, the government subsidizes rent and utility payments for qualified renters, allowing renters to pay only a portion of the rent payment while ensuring that property owners receive fair market rates for each unit. For those properties, we avoid high-cost, high-maintenance amenities, and instead focus on durable and practical features.

The type of design we create for a property will depend on our chosen investment strategy, which is based on local demand and the expectations of our target renters.

Building the Property

Every step of the construction process is managed by Gatsby. From design and permit, demolition and construction, to the finishes, we oversee every detail. Our skilled workers confirm that every aspect of the build matches our high standards. Because we have a large building team, we can minimize the time it takes to complete a project, while maintaining a high quality. And, because of the volume of Gatsby projects, we’re able to negotiate deals on labor and materials to keep costs down and provide greater return potential for our investors.

Transitioning to a Rental Holding

When construction is complete, we find qualified tenants for each unit and get the property stabilized. Then, we order an appraisal to confirm the value of the newly built property, at which point we may refinance the loan.

Investors will now benefit from regular passive cash flow and long-term appreciation of the new asset throughout the rental phase of the investment.

The best part is that investors don’t have to invest any time or energy in the project to receive the benefits. Our professional property management team will handle the day-to-day operations for you.


The multi-family build-to-rent project is an approximately five-year investment.

The development phase of the project typically takes about 24 months. Once the property build is complete, we fill each unit with tenants and stabilize the property.

Gatsby will make the decision on when it is the right time to sell the property based on several factors, including general market conditions, interest rates, and buyer demand. But the target rental period is estimated to be three years. Investors will be informed when we start the property appraisal process and put the property on the market for sale.

Once the property is sold and escrow closed, investors receive their distributions from the sale of the property within 10 business days.

Placing and Tracking 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. When your investment has been placed, you will be given the 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!

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