All Forum Posts by: Scott Trench

@Chris John I'm seeing quadplexes thhat are far cheaper per dollar of income today than they were in 2021. 

For example, I am under contract on a property $75K in NOI for exactly $1M. In 2021, this property would have sold for $1.2M.

While this, still, is hard to cash flow at a 7% 30-year rate, buying a property that used to trade at a 5% cap rate for a 7.5% cap rate is inarguably better value.

@Chris Seveney - I asked Chat GPT about the correlation between Real Estate Syndicator time spent on social media, and the likely correlation to investment returns :). It's mostly a joke.

I think it did good - the influencer who opines regularly on cap rates, interest rates, the Fed, inflation, and is generally an economist, or even a bit of a philosopher, probably does alright! 

The one who thinks that they are masters of the universe in EVERY area of life, has 30 different businesses, claims to be fit as a fiddle, with a life in perfect harmony, shows off huge toys, has 30 different businesses, including selling their time by the hour to provide coaching... this person is not running a real estate syndication business. They are running a personal brand, and I would rather donate my money to a good cause than their next mountain home. 

I think that Chat GPT hilariously acknowledges, however, that if this person then goes on to run for governor of Colorado, then, despite their likely lack of time and attention to the money I put into the investment, that they are likely to put up phenomenal returns as a nice bonus of either being in office, or being a threat of attracting any meaningful percentage of the vote in that state before dropping out and endorsing an eventual winner.

I'm just gonna leave this here...

@V.G Jason - This is an outstanding observation and analysis. 

My belief for SFR is that prices simply don't move much and grow slower than inflation. Rents will rise much at a much faster rate, so the challenge of finding cash flow (enabling more investors to become "capable") will gradually recede as SFR cap rates gradually expand - it will be a process, not an event - over the next few years.

I have found ChatGPT to be particularly useful for testing new Book Covers for BiggerPockets, such as our foray into the personal fitness category with upcoming title "Sweat for Life": 

There are many good locations - I'd suggest that you play around with the "Market Finder" tool at the top of the screen here, included with your pro membership. 

The best market is likely a "Good" cash flow market that you have some ties to, in some way shape or form, or one that is a reasonable drive from where you live, if practical/possible. 

If you are looking for the most extreme distress, look in the Southeast, and look at markets like Atlanta, Tampa, Houston, Austin, and Charlotte. Whether or not it's the bottom, it's definitely a buyer's market in those areas, and they are nice, big cities with major transportation centers. 

I believe that the technically correct answer is that they all moved from California to Texas and Florida, whereupon they realized that it gets extremely hot and humid in those places, has extremely variable weather, and large insects, and are now leaving Texas and Florida. 

@Jay Hinrichs LOL - I live in fear of the banhammer like everyone else. 

All I know is that, as CEO of this company, it was really hard watching influencers and 20-somethings race past me, buying dozens or hundreds of units from 2019-2022. Some of my colleagues and friends bought millions, others tens of millions, and some hundreds of millions (or Billions) during that period.

Real estate is a funny game - it tends to go up, yes, but it does not always go up, and it can go nowhere for a decade or more, as a lot of apartment complex purchasers from 2021 are about to find out. 

Aside from basic maintenance which is simple work, but hard and monotonous work, and keeping the asset positioned to fulfill it's highest and best use, there's nothing you have to do past a certain point to benefit from market appreciation. You just hold it, keep it occupied and well maintained, and let the years roll by. 

The reverse is also true. You can claim to be the best guy in the world at finding and analyzing deals, but when the market turns against you, and you just went all-in, even on the best relative opportunities that market had available at the time, there is nothing you can do to prevent losses, especially if your debt has a maturity date that will force your hand.

Timing the market is an interesting concept. 

Despite what I wrote above, I admit, that I am tempted to go as big as I can, using extremely long-term debt or just by buying real estate with 100% cash, in 2025 and into 2026. Something tells me that the pendulum just flipped, and that just as all these guys who went all in and bragged about their unit count have all seemingly shut up and disappeared, that now is buy time. I'm under contract on a quadplex, fully renovated, at the highest cap rate for a small multifamily that I've purchased in my career, right now. I am buying it for 20% less than the original list price a year ago. 

I see stocks at all time highs, and interest in real estate investing at decade long lows, and I admit, I start to salivate. I sold about half my stock portfolio to purchase real estate here in January.

If it's not time to buy right now, when is buy time? It's certainly a better time to buy than 2021, at least in multifamily!

I am sure I will be very publicly wrong, and you all can make fun of me in two years, when stocks double and real estate prices crash 20% from here, but I just don't know how you can watch this industry, this closely, for this long, and not be raring to go in the current environment.