Disrupt Equity: State Of The Union Report 2022-2023

We hope you enjoyed your holiday season with family and friends. We are excited to share with you Disrupt Equity’s Annual State of The Union 2022 Report, which will include key highlights from 2022 as well as an investment forecast for 2023. 

What an exciting and transformative year it has been! Since the start of Disrupt Equity, we have continued to grow strategically, with our investors, team, residents, and partners as our top priority, and 2022 was no different.

Since this time last year, Disrupt Equity has doubled the size of our firm, and today, Disrupt holds over 140 employees and more than $680MM in Assets Under Management. We are incredibly proud to hold a track record average annualized return of 50.8% (AAR) across all of our full-cycle deals!

It has truly been a fantastic year, and we are grateful to our talented team and investors for partnering with us on this journey—we can’t wait to see how far we can go together! 


$2.8M Distributed to Our Investors

  • In 2022 alone, Disrupt has distributed $2,819,642 to our investors.
  • We are extremely proud to hold a track record of 50.8% average annualized return (AAR) across all full-cycle deals!

$303M Assets Acquired in 2022

  • In 2022 alone, Disrupt has distributed $2,819,642 to our investors.
  • We are extremely proud to hold a track record of 50.8% average annualized return (AAR) across all full-cycle deals!

11 New Communities Under Disrupt

  • Our in-house management firm has taken over 11 properties, with another 5 communities in the pipeline to be taken over in the next 60 days.

80 New Disrupt Employees

  • This past year, we have hired over 80 new employees across the Disrupt organization, 18 of which are in-house corporate office staff members, with another 62 new hires serving our properties onsite.

#1 Fastest Growing Company in Houston

  • We received over six awards this past year, including being ranked #1 fastest-growing company in Houston, #6 fastest-growing real estate company in the nation by Inc 5,000, the Fast 100 list by the Houston Business Journal, Most Admired CEOs by GlobeSt., Entrepreneurs of the Year Nominees by Ernst and Young, and many more!

Disrupt Equity has contributed over $100,000 to Disrupt Gives

  • For those that invest with us, you know that on each of our deals, Disrupt contributes 25% of our asset management fee to fund our 506(3) charity, Disrupt Gives, an organization dedicated to helping struggling families with rental relief as well as financial education to build long-term success and sustainability. This year, we have been proud to raise over $100,000 to fund the Disrupt Gives mission.

2022 Multifamily Investing Recap

The rental housing industry has experienced record-high prices and surging rental rates for the past two years. After the strong rebound for the U.S. economy in 2021, multifamily investment growth has begun to slow in the face of rising inflation, interest rates, and geopolitical events throughout 2022. Investor uncertainty has become the new normal, and we have seen the stock market plummet this year with over a 20% decline in the S&P 500. 

Despite economic uncertainties, multifamily has continued to remain strong throughout 2022. During the third quarter of 2022, Moody’s Analytics CRE reported that rent growth remained strong, climbing 10.7% year-over-year, yet down from the second quarter’s skyrocketing rate of 17.7%. According to Multi-Housing News, “While record rent growth in 2021 was the result of record-high absorption (580,000 units), the softening in absorption—roughly half that pace in 2022—does not send negative signals but is instead falling into values representative of a typical solid year.” 

Realtor.com’s chief economist Danielle Hale relays to CNBC, “My expectation is that rent growth will slow, but we may not see it go back to what was typical before the pandemic.” Instead, she anticipates rent growth, while not as dramatic as in 2021-2022, will likely remain elevated well into 2023.

While economic uncertainty and the decline in the stock market can be worrisome to many investors, we are confident that multifamily rental housing remains favorable. And here’s why:

And to hit the nail on the head, individuals across America can eat, shop, or work out anywhere, but everyone needs a roof over their head – all of which drive the recession resilience of multifamily real estate. 

2023 Multifamily Investing Outlook 

As our outlook on multifamily for 2023 is optimistic, Disrupt Equity has remained and will continue to remain careful and strategic. Our stringent underwriting criteria stand firm, and we take every measure to structure our deals with the intention of protecting our investors (low leverage/high reserves/rate caps) with our primary focus on tight and tactical operations because the key to the success of each deal is having a team of operators behind the deal who can perform, pivot, and manage in any given market cycle. 

In the next 12 months, we anticipate seeing many distressed multifamily deals across the nation entering the market due to the rise in interest rates and poor property and asset management. 

We firmly stand by Warren Buffet when he states – “be fearful when others are greedy, and greedy when others are fearful.” Don’t be afraid to play offense if you find the right opportunity.” We foresee numerous great opportunities coming in 2023 for Disrupt Equity to take over poorly managed deals, improve operations, add value, and generate strong returns for our investors. 

Our acquisitions team remains watchful and active in underwriting hundreds of deals a week across the Sunbelt Region. We continue to remain bullish on Texas, Florida, and Georgia, as well as other states across the Sunbelt. Texas, Florida, and Georgia, in particular, are economic powerhouses, and they have been some of the fastest-growing states in the nation. Beyond their business-friendly, tax-friendly, and landlord-friendly climate, these states also benefit from strong population growth, corporate relocation, and job diversity. Here are a few incredible stats that display the growth of these markets: 

  • Texas leads the nation for the fastest annual jobs growth rate (November 2021 – November 2022) at 5.1%. (Texas Workforce Commission)
  • Texas is ranked as the ninth-largest economy among nations of the world, larger than Canada, Korea, Russia, and Australia. (2021 GDP, IMF)
  • As reported by the Census Bureau on Dec. 22, Florida’s population grew to 22,244,823 between 2021 and 2022—an increase of 1.9 percent—making it the fastest-growing state in the country.
  • Georgia has a favorable business climate, with a low cost of living and a favorable tax structure, and remains the number 1 state for business for the 9th consecutive year by Area Development Magazine.

Each of these states has a lot to offer and is well-positioned for continued economic growth in the years to come. As we move into 2023, intending to identify high-quality investment opportunities for investors, above and beyond our acquisition goals, our focus and dedication will remain on executing the business plan and keeping tight operations on our existing assets. 

Final Words To Multifamily Investors 

It is crucial, now more than ever, for investors to protect their capital from the volatility of crypto and the stock market, as well as to protect against the falling value of the U.S. dollar due to inflation. Now is the time to find safe alternatives to preserve and expand your wealth and invest in recession-resilient assets at a pace that outweighs inflation. 

The next 36 months are not the time for speculative investing. Choose operators with a track record of success who are also working in high-quality markets. 

If you are not a current investor with Disrupt Equity, we hope to earn your trust and partner with you in the new year. If you are interested in joining our investor list, you can sign up here.  

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