On The Market

Are Real Estate Syndications Dead? w/Brian Burke and Scott Trench

Sep 30, 2024

Brian Burke, a savvy multifamily syndicator who foresaw market changes, discusses the unsettling realities of real estate syndications. Joining him is Scott Trench, CEO of BiggerPockets, who shares his own syndication struggles. They delve into why many investors are facing capital calls, the rise of inexperienced syndicators, and the staggering number of multifamily investors with short-term loans due. With multifamily properties in a precarious state, they also explore the most promising and risky regions for syndication investments.

46:57

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Episode guests

Scott Trench

Brian Burke

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Episode notes

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Quick takeaways

Recent declines in property values and challenges like high interest rates are causing widespread distress in the multifamily syndication market.

Investors must adapt to current market dynamics and consider opportunities in undervalued assets for future recovery and growth.

Deep dives

The Appeal and Decline of Syndications

Investing in real estate syndications often attracts individuals seeking passive income without hands-on management. However, recent trends indicate diminishing returns in syndication deals, raising concerns among investors. Many in the market are questioning whether lucrative syndication opportunities still exist in light of these changes. Understanding these dynamics is crucial for both potential investors and current stakeholders contemplating future engagements in syndications.

Intro

2min

Understanding Real Estate Syndications

8min

Understanding Risk in Real Estate Syndications

3min

Navigating Real Estate Syndication Challenges

18min

Sponsor Highlights and Promotions

3min

Navigating Distress in Multifamily Real Estate

12min

Are real estate syndications dead? Some multifamily syndicators are making capital calls and hiding information from investors who anxiously wait (and pray) for their money to be returned. A lot is going wrong, so should you pause investing in real estate syndications for now, or should you write them off entirely? Brian Burke, who saw it coming and sold almost everything before prices fell, is on today to give us his answer.

Joining him is a fellow syndication investor and BiggerPockets CEO, Scott Trench, who’s had his fair share of syndication headaches over the past few years. We’re going back in time, talking about what exactly went wrong for multifamily syndications, why we saw a rise in untrustworthy/inexperienced syndicators entering the market, and why multifamily specifically is taking the majority of the headwinds.

We’re also sharing the numbers on the almost unbelievable amount of multifamily investors who have short-term loans coming due, all at a time when interest rates are still high and values are close to (if not at) the bottom. We’ll even talk about our own failed deals and whether or not we’d continue investing in syndications.

In This Episode We Cover

Real estate syndications, general partners, and limited partners explained

Why the multifamily real estate market is a “traffic collision” in 2024

Areas of the country with the highest/lowest risk for real estate syndications

The astonishing amount of distressed investors with short-term loans coming due

Our own failed investments and whether we’d still invest in syndications

When multifamily real estate investments could finally rebound and become investable again

And So Much More!

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