“What does a 10% allocation to multifamily do for my client’s portfolio?”
It’s a common question among RIAs and one that deserves more than a generic answer. In 2025, advisors are re-evaluating traditional portfolio structures to seek better diversification, income consistency, and downside protection for their high-net-worth clients. [1][2]
According to the Wealth Sizing Model, high-net-worth individuals with $30 million or more in net worth allocate approximately 32% of their wealth to residential real estate and about 21% to commercial real estate—excluding the 5% invested in Real Estate Investment Trusts (REITs). Combined, these allocations represent over half of their total portfolio. [1][2]
This article provides a case study that breaks down how even a modest allocation to private multifamily real estate, specifically through a vehicle like BAM Multifamily Growth Fund V, can materially improve outcomes for investors.
Let’s walk through the numbers.
COMPARING PORTFOLIO ALLOCATIONS
We evaluated two model portfolios for Client X, who has $1 million to invest.
| Asset Class | Allocation | Projected Return Range |
| Marketable Securities | 70% ($700k) | ~41,000–$53,000 |
| Multifamily Real Estate | 10% ($100k) | ~8,000–$12,000 |
| Alternatives | 5% ($50k) | ~5,000–$7,500 |
| Cash | 15% ($150k) | ~1,500–$3,000 |
| Total (avg. return: 5.55% – 7.55%) | 100% ($1M) | ~$55,500–$75,500 |
| Asset Class | Allocation | Projected Return Range |
| Marketable Securities | 77.8% ($778k) | ~$45,580–$58,920 |
| Multifamily Real Estate | 0% ($0) | $0 |
| Alternatives | 5.6% ($56k) | ~$5,600–$8,400 |
| Cash | 16.7% ($167k) | ~$1,670–$3,340 |
| Total (Avg. return: 5.29% – 7.07%) | 100% ($1M) | ~$52,850 – $70,660 |
KEY TAKEAWAYS
In the examples above, it is clear that even a 10% shift to private multifamily:
- Increases total projected return without increasing overall risk
- Reduces volatility (private assets don’t fluctuate daily like public markets)
- Hedges inflation through rent growth and property appreciation
- Strengthens downside protection, especially in recessions
Note that these are illustrative estimates. Actual results depend on market conditions and specific asset performance. [Z]
WHY FUND V? SUCCESSFUL RIA ALLOCATIONS
For RIAs ready to add direct multifamily exposure, BAM Multifamily Growth Fund V provides institutional-quality access in a structure designed for HNW investors. Here’s how it enhances the portfolio.
| Asset Class | Allocation | Projected Return Range |
| Marketable Securities | 70% ($700k) | ~$45,580–$58,920 |
| BAM Multifamily Growth Fund V | 10% ($100k) | $15,000 – $20,000 |
| Alternatives | 5% ($50k) | ~$5,000 – $7,500 |
| Cash | 15% ($150k) | ~$1,500 – $3,000 |
| Total (Avg. return: 6.25% – 8.35%) | 100% ($1M) | ~$62,500 – $83,500 |
Compared to Scenario A, Fund V delivers ~$5,000–$8,000 more annually with similar volatility, thanks to its target IRR of 15–20%. [1][2][3]
Sample Portfolios with Capital Flows
- Target IRR: 15%–20%
- Target Equity Multiple: 2.0x–2.5x
- Preferred Return:
- 7% for $200,000 to $999,000 investments
- 8% for $1,000,000+ investments
- Sponsor Co-Investment: 5%–10%
- Target Hold Period: 5–7 years
- Self-directed IRA eligible
- Pass-through tax benefits, depreciation, paper losses, etc. [1][3]
As a pass-through LLC, Fund V is designed to deliver meaningful after-tax benefits:
- Depreciation and cost segregation may generate paper losses of 35%–40% in the early years
- Capital gains treatment on property exits
- Passive loss offset potential for investors with other passive income
- Schedule K-1 reporting [1][3]
Whether your clients are in the accumulation or distribution phase, private real estate helps improve long-term outcomes without requiring a wholesale portfolio overhaul.
Ready to run the numbers for your clients?
Connect with a BAM Capital investment team member to walk through a custom portfolio scenario and see what Fund V could do for your clients’ outcomes. Remember that no investment is without risk. Before making financial decisions, consult your investment professional.
BAM Capital partners with accredited investors who want to enjoy passive income and all the other benefits of multifamily private placement. As the private equity arm of The BAM Companies, BAM Capital has been focusing on buying the most profitable assets and staying disciplined in its investment thesis. BAM Capital’s investment strategy aims to create forced appreciation while mitigating investor risk. To date, the brand has successfully managed over $1.7 billion in assets across ~9,000 apartment units.
For additional multifamily real estate insights, visit Pathways to Passive Wealth, BAM Capital’s new platform designed to make real estate investing more accessible, transparent, and achievable for aspiring and experienced investors.
SOURCES
[1]: Multifamily Real Estate Funds: A Guide for RIAs. (2025). “Topic 5.1 | Return Metrics 101: RIAs and Multifamily Real Estate.”
[2]: BAM Capital. (2025). “Asset Allocation for the Wealthy.” https://bamcapital.com/asset-allocation-for-the-wealthy/
[3]: BAM Capital. (2025). “BAM Capital’s tested approach looks like a strategic continuation.” https://bamcapital.com/introducing-fund-v-bam-capital-2025/
