All Forum Posts by: Andrew Hogan

Quote from @Chris Seveney:

Quote from @Jack B.:

This guy called the last two crashes, says there will be one in 2026 too. https://www.thisismoney.co.uk/money/mortgageshome/article-12...

But we have the lowest demand since the 90's, even lower than the 2008 crash. Prices in Seattle dropped 20% since rates went up. Did we already see a crash in 2022 and start a new 18 year cycle?

 No one can predict if we will have a crash because there are too many macroeconomic issues.

If the government keeps printing trillions a year then yeah we will not have a crash.

Let me tell you what I am seeing and people can make their own assumptions:

1. Asset based lenders / lender to lender financing (those who provide financing to companies for equipment, operations, etc. They will not touch real estate. They have stopped lending to real estate or even lenders who lend on real estate)

2. Commercial is worse than what the media is telling you. This includes self storage and multifamily. People do not understand how impactful commercial is on the banks. This is a big big deal.

3. A large percentage of small businesses are defaulting on rents and their loans.

4. The job market is seeing multiple applicants per opening. Why? because the only jobs that were hired in last six months were auto unions back to work, government workers and healthcare workers. Other sectors are shedding jobs. 

5. Incomes are not keeping up with the cost of housing. It is down from 38% to 32% but its still abnormally high.

6. In order to calm inflation, housing needs to soften as it comprises 30%+. So if housing stays strong, so does inflation and rates will remain higher. Fed will not cut rates if the economy is still "steaming along". Eventually the inflation and high rates is going to have ramifications.

Note this is not in every location nationwide, as some pockets are more resistant and some are less resistant.

lord just let me finish my last 25 new builds then you can crash the market :).. we are slower but we are selling and have not really had to lower prices but a few grand on a few models. the fix flip refi model is still working well for us. And land deals are going quite well also. but thats just our little tiny slice of market segments.

I agree with fund of funds slowing down or going out of bizz like Peer st.  And commercial lending is kind of stopping on its own at least out our way were sellers want 5 caps rates are 7 so not much moving until commercial comes down a bunch.

@Melanie P.

I agree with your overall sentiment of the syndication space, but not of your callout of the people on this thread. I asked, they answered. They have theses they believe in, otherwise, they wouldn't be putting together the deals. 

I'm a massive bear on the multifamily space in 2024, and not afraid to say so. I will come out in the next week or so with 5,000 words discussing why another 30% drop in values from the present is possible this year. 

That said, there are regional variances, and the people on this thread feel opposite to my views. Which is why I asked. 

Of course, you are right that this is the wild west. How can it not be? The assets are sized in that sweet spot of $5-$10M, where it's too small to afford a compliance department, but big enough to meaningfully impact the lives of the operators, investors, and tenants who are all interrelated. 

There are fortunes to be made, and lost, in this space. There are scammers, bad operators, the unlucky. There are also those who are honest, try their best, believe, and who will win. And the BiggerPockets community will be forever obsessed with it, as I am. It's the obvious next step for real estate investors who have amassed large portfolios, but aren't ready to move into instutitional assets.

I wonder - what's the right way to make this productive for these investors? I don't want to wait for the SEC, and would rather democratize this here on BiggerPockets. I think that we need to hold two groups accountable: 

- The Syndicators

- The LPs who invest with them

Syndicators should aspire to ever greater professionalism, legal, diligence, and compliance bars. 

LPs should aspire to the same, and to being able to identify "good", differentiate it from "bad" and call out and share their experiences for the community to collectively improve. 

Quote from @Andrew Hogan:

Quote from @Jay Hinrichs:

Quote from @Bill B.:

I never know if this is just apartments? In 25 years I’ve always raised rent. I’ll be raising rent 5-7% this year too. It just seems like the most useless data of all time for any city that isn’t 100% identical properties in identical quality neighbors built the same year. 

If they wanted to be halfway relevant it would be broken out by property type, zip code, and most importantly rent per SF. lumping $5,000/mo condos on the strip with $2,500/mo SFR in good neighborhoods, with $800/mo 500sf war zones is useless.

Who's reporting this data? I'm not. Are they just scouring rental sites and assuming every property that disappears was rented? Do they count STR? How about MTR? How about house hacking?

A 1.5% rent drop? Are they suggesting people are literally dropping their rent by $20-30/mo? As I’ve stated before. Anyone that leaves for $25/mo was leaving anyway. 

to me a better metric would be DOM  ( Days on Market) or absorption. One may not lower rents but one may take 60 90 120 days to find a qualified tenant.  Instead of having a tenant move in right away with no real loss of rent. ???

 Great point Jay. Another thing that comes to mind is the increasing need to add value to these businesses/properties in ways OTHER than increasing rents. There have been too many skinny deals with the hope to increase rents 50%. 

Imagine capable of boosting the NOI of a 300-unit deal by 500k before ever increasing rents a dollar.

Having the ability to increase NOI via managerial efficiencies is crucial now more than ever.

 I heard some lenders are stopping lending money to rehab for value-add apt, not sure how true is that but if it's true, then it's quite challenging... 

Quote from @Bill B.:

I never know if this is just apartments? In 25 years I’ve always raised rent. I’ll be raising rent 5-7% this year too. It just seems like the most useless data of all time for any city that isn’t 100% identical properties in identical quality neighbors built the same year. 

If they wanted to be halfway relevant it would be broken out by property type, zip code, and most importantly rent per SF. lumping $5,000/mo condos on the strip with $2,500/mo SFR in good neighborhoods, with $800/mo 500sf war zones is useless.

Who's reporting this data? I'm not. Are they just scouring rental sites and assuming every property that disappears was rented? Do they count STR? How about MTR? How about house hacking?

A 1.5% rent drop? Are they suggesting people are literally dropping their rent by $20-30/mo? As I’ve stated before. Anyone that leaves for $25/mo was leaving anyway. 

to me a better metric would be DOM  ( Days on Market) or absorption. One may not lower rents but one may take 60 90 120 days to find a qualified tenant.  Instead of having a tenant move in right away with no real loss of rent. ???

I have invested with several syndicators over the past 7 years. Curious if anybody has any others to recommend as I like the idea of being as diversified as possible as I would like to avoid a Bernie Madoff type situation ruining my retirement. :)

In no particular order:

Rise48 - Arizona and Texas multifamily;

Think Multifamily - Texas multifamily; 

Open Door Capital - Texas multifamily; 

Lonestar Capital - Texas multifamily; 

Camino Verde Group - Vegas, Texas and South Carolina multifamily; 

Disrupt Equity - Texas multifamily; 

Garages of America - Texas storage; 

Ashcroft Capital - multiple states.

Others I have heard of but not invested in:

BAM - Indy;

Grocapitus - Arizona and Texas; 

Elevate CIG - currently has a deal in South Dakota; 

Praxis Capital - seems to do a lot in Georgia but currently just has a fund open;

Sunrise Capital - parking lots and multifamily - storage too? 

Wellings Capital - fund; 

ANY OTHERS you recommend? Any input on the above?  I'd love to get into some other sunbelt states besides Texas as I seem to be Texas heavy right now.