Whats next in Multi Family and how do you get in front of it?

[Leslie Ray]

Hoping people smarter than me can shed some light on these questions....

So, there's a lot of competition in the Multi Family Space and people are buying properties where the numbers DO NOT MAKE SENSE because either .....

A. They are fund managers from Wall Street and get paid points on the front end and asset mgmt fees. 

B. They are new investors and do not know how to properly underwrite or simply do not care because they are looking to get a acquisition fee and hoping it woks out...

So the idea is ... when the recession hits, it will cause rents to shift and the people who over payed for their property will lose the property because they will either have to cover the difference in their debt service each month or may need to come to the table with more money for DP for the new DSCR. Which they most likely won't be able to do. So they will let them go back to the banks? Where does Wall Street Money go after that?

So Im assuming you want to start building relationships with bank Asset Managers now and raising money now .......but..... what would you do if you've haven't done a multi family deal yet? 

 Why would you get the deal (when recession hits) over all the other syndicators who have been in the business longer, who have more money and is  just waiting on the sidelines? How do you get any kind of track record started right now if every deal seems to be over priced? 

Is there a play for new people who want to get into Multi Family who do not  want to buy a crap deal right now?