Is Multifamily Still the Best Passive Income Play? Here’s What I’m Seeing Now…

If you’re like me, you’re probably keeping a close eye on where the market’s heading. I mean, everyone and their dog has been saying multifamily real estate is the way to go.

And for years, I’ve agreed. But is that still true in 2025? Are apartments still the best way to build passive income, or is it time for a pivot?

To help answer that, I invited my good friend and longtime real estate investor Lane Kawaoka back to the show. Lane’s been in the game for over 15 years. He’s done everything from single-family rentals to large-scale multifamily syndications, and now he’s shifting into private equity. So when a guy like Lane starts pivoting, I pay attention.

And trust me, you’ll want to as well.

From the Ground Floor to the Wealth Elevator

Lane shared his journey with us starting out as a maxed-out 401(k) guy, doing what most people were taught: buy your house, save hard, retire someday. But like many of us, he realized that the formula doesn’t actually work if you want freedom. So, he pivoted into real estate, buying rental property after rental property.

But after a while, single-family homes became a headache. Turnkey rentals weren’t generating the profits they once did. Maintenance, tenant issues, and inefficiencies led him to bigger opportunities: multifamily syndications. He leveled up, started partnering on larger deals, and eventually created his own investment platform to serve other investors.

That’s when Lane introduced the concept of the Wealth Elevator, a framework showing that your strategy should evolve as your net worth grows. The investment strategy that works at a quarter million net worth doesn’t work when you’re sitting at $5 million. It’s not a one-size-fits-all game. That’s a message I deeply resonate with.

So, Is Now the Time to Buy Apartments?

Lane and I dove deep into this question. And let me tell you it’s not a simple yes or no.

Here’s what’s happening: multifamily prices have come down. That’s good news. But interest rates are still up. That’s the challenge. Many deals don’t pencil out because lenders aren’t giving you the same leverage they did before. Instead of 75% loan-to-value, you’re getting 60% or less. That’s a massive capital gap to fill.

So, unless you find a rare gem like a deal with an assumable 3.8% interest loan and a debt coverage ratio above 2.2, you may want to hold back or tread carefully.

But that doesn’t mean you sit on your hands. Lane and I both agree: contrarian investors can find opportunity right now if they know where to look and how to pair great assets with smart financing.

The Rise of Private Equity

Now here’s where it gets interesting.

Lane’s moved from chasing big multifamily deals to something most investors overlook: small business acquisitions what he calls friendly private equity.

Instead of fighting over the same apartment buildings, Lane’s team is partnering with established business owners in blue-collar industries, such as HVAC, plumbing, pool services, and helping them scale. He’s not flipping companies or extracting value like Wall Street PE firms. He’s bringing capital and keeping the operator in place so they can grow together.

I loved this part of our conversation. Why? Because it reinforces something I’ve said for years: your business is your best investment. And when you can partner with proven operators, you can create value, generate income, and maintain stability—even when interest rates are high.

Why the Turnkey Days Are Gone

Lane broke some hearts when he said this, but it’s true: the old turnkey model doesn’t work like it used to.

You used to be able to put down $30K on a $100K home and make solid returns. Today, that same property might cost $140K and rent for just $1,200. It barely breaks even. That 1% rule? Forget about it.

The entry-level investor is now pushed toward syndications and private equity. That’s not a bad thing if you know what you’re doing and who you’re working with. This is why investor education and community matter more than ever.

The Real Ripple Effect

One of the most powerful parts of our chat was Lane’s vision for building community. He hosts retreats in Hawaii, not because they generate direct ROI, but because they build something more valuable: relationships. Conversations with other investors. Legacy for the next generation.

And I’m 100% with him on that.

This isn’t just about getting rich. It’s about living richly, creating a life of meaning, and using wealth as a tool to bless others. That’s the ripple effect. And I’m so honored to share that mission with Lane and all of you.

Final Thoughts

So, is multifamily dead? No, not at all. But the game has changed. And if you’re not adapting, if you’re not learning and exploring new ways to build passive income, you’ll get left behind.

Whether it’s apartments, private equity, or your own business, the path to financial freedom is still wide open. But now more than ever, it requires strategy, flexibility, and relationships.

Let’s keep creating ripples. Let’s go beyond traditional thinking and build the life we were meant to live.