The Next Big Thing in Real Estate Investing

real estate investing Jan 31, 2022


The real estate market is on the rise. The cost to provide new housing has gone through the roof over the last decade; with the last two years absolutely decimating affordability for most people. Recent research shows that in 2025, there will be a shortage of over 1 million affordable homes in America. With such a shortfall in housing - rents will increase even more.

So what can we do about it? More specifically what can real estate investors do? In my opinion the solution will come in several forms:

  1. Repurposing existing properties for multifamily housing.
  2. Re-looking at the amount of square footage people need in private space & creating ample common space.
  3. Challenging existing building techniques to reduce costs.



The pandemic has forever changed how we live our lives and with it has rendered various forms of real estate - nearly obsolete.

Think shopping malls, hotels & motels, office space, retail and everything in between. Almost every aspect of this sector has felt the pain of the world changing (seemingly overnight) and has had to adjust.

Personally I don't think we've seen the full magnitude of this yet as many of these properties are owned by extremely well capitalized groups; many of whom remain optimistic that things will get back to "normal" and have the staying power to hold firm... for now.

That said - numbers don't lie and in a lot of the markets that we've researched there is a glut of commercial real estate and a real shortage of housing options. My team and I are doing due diligence on several properties as we speak that fit this very narrative. The numbers are quite compelling for multifamily... not so much for what they were originally built for.


By and large we've been spoiled in North America with the amount of space many people have been able to enjoy. In many parts of the world; people live in a fraction of the space we do here but instead focus on spending time in common spaces that suit their requirements. I believe this concept is coming to North America; largely driven by affordability. As shopping malls and other commercial properties are repurposed I believe they will be done so with a keen focus on optimizing common space while minimizing individual unit square footage.


I've been studying modular housing and innovative building techniques for years now and although impressive advances have been made I think this will be a longer term solution as it's still not affordable. Like a Tesla car... it took a few reiterations to bring the cost down to a range where most people could afford the base model. A large unknown here is also the vast amount of laborers and trades that would be displaced in a world where prefabricated and "pop up" homes were accepted "as is" without a "traditional" electrician, plumber or HVAC technician signing off. This will be a long,slow burn in my opinion.


To summarize I think real estate investors should focus on repurposing existing commercial properties into multifamily housing. These buildings can be repurposed to include more common space and less individual square footage. When you combine this with more efficient building methods I believe this will provide a significant portion of the housing in the next few years.

What do you think?


Marcin Drozdz

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