Multifamily Investment Strategies: Core Plus vs. Value-Add
Dec 10, 2025 - Travis Cadman - Southwest Urban Ventures.
A lot of investors have been asking me lately “what is the main difference between Value-add and Core Plus assets.
Below is a quick overview explaining the main differences.
Core Plus
Profile:
Stabilized, high-quality multifamily assets with strong occupancy and predictable cash flow. Properties are typically newer or recently renovated and located in desirable submarkets.
Business Plan:
Light operational improvements—leasing optimization, expense management, minor cosmetic enhancements. No major construction risk.
Risk/Return:
Risk: Low–moderate
Target Returns: 6–9% annualized
Cash Flow: Steady, immediate
Appreciation: Primarily market-driven
Ideal Investor:
Income-focused investors seeking capital preservation with stable yield and limited execution risk.
Value-Add
Profile:
Older or underperforming multifamily properties with clear potential to increase NOI through renovations and operational repositioning. Units are often classic and rents sit below renovated comps.
Business Plan:
Renovate interiors/exteriors, upgrade amenities, correct deferred maintenance, rebrand, enhance operations, and drive rent growth. Execution matters.
Risk/Return:
Risk: Moderate–high
Target Returns: 12–18%+ annualized
Cash Flow: Lower initially, improves post-renovation
Appreciation: Primarily forced via NOI growth
Ideal Investor:
Growth-oriented investors seeking higher returns through active value creation and strategic repositioning.