Most people who got wealthy through real estate cannot explain how it happened. They will tell you they "bought the right building at the right time." That is true, but it is not the whole story.
The whole story is leverage stacked on cash flow. A 20% down payment on a multifamily that trades at an 8% cap rate quietly turns rent checks, principal paydown, and appreciation into wealth at a multiple no other ordinary investment offers. Once you see the math, you cannot unsee it.
A representative 8-cap deal
A Seacoast multifamily at $1,000,000 trading at an 8% cap rate. NOI on day one: $80,000.
Buyer puts 20% down, or $200,000. Finances the remaining $800,000 at 6.25% on a 30-year amortization. Annual debt service: about $59,100.
Year-one cash flow: $80,000 minus $59,100 leaves $20,900 in your pocket while the tenants pay the bank.
That is year one, and only one of four forces working in your favor.
The four returns stacking
Cash flow grows. Rents on the Seacoast rise about 3% a year. Your mortgage payment is fixed forever. By year 10, the $20,900 in year-one cash flow has grown to roughly $45,000. By year 20, near $81,000. By year 30, after the loan is paid off, every dollar of NOI is yours.
Principal paydown. Tenants amortize the loan for you. After 10 years, roughly $126,000 of the original $800,000 mortgage has been retired. After 20, more than $362,000. By year 30, the loan is gone entirely.
Appreciation. At a conservative 4% annual rate, well below the actual long-term Seacoast trend, $1,000,000 becomes $3,243,000 by year 30.
Inflation tailwind on debt. The $59,100 debt service today is real money. The same $59,100 in 2056 will be a rounding error against rents that have nearly tripled. Inflation does not hurt landlords. It hurts the bank that lent you the money at a fixed rate.
The year-30 number
Equity at year 30: $3,243,000. Cumulative cash flow over the hold: roughly $2,033,000. Total return on the original $200,000 invested: about $5,276,000, or roughly 26x.
Run it at 5% appreciation, closer to the actual NH long-term trend, and the number tops $6 million.
Why the 8-cap window matters right now
Portsmouth multifamily has already compressed to 5 and 6 caps, where the year-one math is far less forgiving. Rochester, Somersworth, Dover, and South Berwick across the Maine line still have 8-cap inventory closing every month. The reason is straightforward: less competition from out-of-state institutional capital, smaller deal sizes that fall below the radar of larger funds, and a Seacoast rent trend that pushes those submarkets up the list every year.
As rates settle into the high 5s by 2027 to 2028, more capital will move into Strafford County multifamily, and the 8-cap will compress to a 7 and then a 6. The 26x outcome at year 30 happens for the buyers who lock in the 8-cap before that compression finishes.
What the math says to do in 2026
Hold what you own. The compounding has not finished compounding. Years 15 to 30 of any hold are where the wealth shows up.
Refinance when the rate cycle gives you a window. Rates in the high 5s, expected by 2027 to 2028, will create the best refinance opportunity in five years.
Deploy unused equity into the next acquisition rather than letting it sit dormant.
If you don't yet own, start with one cash-flowing multi. The compounding only works once the clock is running.
Want to see the math on your situation?
Send us a target address or a target market and we will model the full 30-year curve, including realistic rent growth, vacancy, capex, refinance scenarios, and tax treatment.
Talk to Stone Keane