Sound the Alarm: A Commercial Real Estate Crash is Likely

A commercial real estate crash is looking more and more likely in 2023. Rising interest rates, compressed cap rates, and new inventory about to hit the market is making commercial real estate, and multifamily more specifically, look as unattractive as ever to a real estate investor. But with so much money still thrown at multifamily investments, are everyday investors going to get caught up in all the hysteria? Or is this merely an overhyped crash that won’t come to fruition for years to come?

Scott Trench, CEO of BiggerPockets and host of the "BiggerPockets Money Podcast," has had suspicions about the multifamily space since mortgage rates began to spike. Now, he’s on the show to explain why a crash could happen, who it will affect, and what investors can do to prepare themselves. This is NOT a time to take on the high-stakes deals that were so prominent in 2020 and 2021. Scott gives his recommendations on what both passive and active investors can do to keep their wealth if and when a crash finally hits.

But that’s not all! We wouldn’t be talking about multifamily without Andrew Cushman and Matt Faircloth, two large multifamily investors who have decades of experience in the space. Andrew and Matt take questions from two BiggerPockets mentees, Philip and Danny, a couple of California-based investors trying to scale their multifamily portfolios. If you want to get into multifamily the right way or dodge a lousy deal, stick around!

00:00 Intro
02:26 Sound the Alarm!
10:54 Recommendations for Investors
13:53 Could this Hurt Residential Real Estate?
19:48 Quick Tip
20:53 Vetting a Deal When Raising Capital
34:18 How to Scale from Small to Large Multifamily
43:34 Cash Flow vs. Appreciation in 2023

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Podcast Episodes Mentioned in Today’s Show:
Ben Miller: https://www.biggerpockets.com/blog/on-the-market-65?utm_source=youtube&utm_medium=description&utm_campaign=none
Brian Burke: https://www.biggerpockets.com/blog/on-the-market-71?utm_source=youtube&utm_medium=description&utm_campaign=none
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Hear Our Mentorship Episodes:
Part 1: https://www.biggerpockets.com/blog/real-estate-708?utm_source=youtube&utm_medium=description&utm_campaign=none
Part 2: https://www.biggerpockets.com/blog/real-estate-719?utm_source=youtube&utm_medium=description&utm_campaign=none
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Connect with Andrew, Dave, Matt, and Scott on BiggerPockets:
Andrew: https://www.biggerpockets.com/users/andrewc58?utm_source=youtube&utm_medium=description&utm_campaign=none
Dave: https://www.biggerpockets.com/users/davem27?utm_source=youtube&utm_medium=description&utm_campaign=none
Matt: https://www.biggerpockets.com/users/mfaircloth?utm_source=youtube&utm_medium=description&utm_campaign=none
Scott: https://www.biggerpockets.com/users/scotttrench?utm_source=youtube&utm_medium=description&utm_campaign=none

Episode 721

Show notes at: https://www.biggerpockets.com/blog/real-estate-721?utm_source=youtube&utm_medium=description&utm_campaign=none

#biggerpockets #realestatepodcast #biggerpockets721


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