Scott Trench, CEO of BiggerPockets, shares his first-hand experience losing money in real estate syndications - and what it teaches us about finding quality operators. He also looks at the commercial real estate market, predicting pain over the next 18 months.
Here are some useful key insights from this episode:
- Avoid syndicators that diversify across many markets instead of specializing in one. Look for operators with proven long-term track records close to the properties.
- Thoroughly analyze a syndicator's assumptions about rent growth, expenses, and exit cap rates. Be wary of overly optimistic projections just to show high IRRs.
- Commercial real estate is in for major pain as oversupply crashes into higher rates. Rents may not recover for years. Protect yourself by understanding these market forces.
Tune in now to hear BiggerPockets insider's unfiltered lessons on thriving through today's syndication landmines and shifting market tides.
Timestamps:
00:46 Introduction to Scott Trench of Bigger Pockets
02:53 Four major asset types in Scott’s portfolio
06:32 Investment strategy, prioritizing real estate and index funds
09:35 Scott’s real estate buying strategy
12:46 Passive investing in syndications with mixed results
17:28 Real estate market challenges in 2023 and 2024
20:43 Taxes, insurance, and interest rates
23:43 Multifamily and commercial real estate predictions for 2025 and further
28:13 Investing in a real estate syndication operator's integrity and performance
34:31 Unethical practices in the multifamily investing industry
37:23 The danger of fraud and challenges of investing in real estate syndications
47:11 Scott’s future investing plans
51:46 Personal vision, goal-setting, and aligning goals with a spouse
1:00:14 How does Scott give back
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