Episode 61: Multifamily Market Trends 2024 with Michael Episcope

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Episode: Insights into the Multifamily Real Estate Market with Michael Episcope

Guest: Michael Episcope

• Co-founder and Co-CEO of Origin Investments (2007)
• Role: Oversees investor relations and capital raising; co-chairs the investment committee
• Background:
• Formerly a top trader, recognized twice by Trader Monthly Magazine as one of the top 100 traders in the world
• 30+ years of investment and risk management experience
• Education:
• Undergraduate and Master’s degrees from DePaul University

Connect with Michael

• Origin Investments
• LinkedIn

Episode Overview

In this episode of Tech Equity and Money Talk, host Christopher Nelson chats with Michael Episcope about the multifamily real estate market.

Key Takeaways:

• Deep Dive into Multifamily Real Estate: Insights for seasoned and novice investors.
• Importance of Risk Management: Strategies for effective real estate investment.
• Due Diligence: Understanding critical assessment criteria.
• Adaptation to Market Conditions: Navigating changes in the real estate landscape.

Why Choose Multifamily Real Estate?

• Discover the criteria that led Michael to select multifamily real estate as a key wealth-building vehicle.

In this episode, we talk about:

• Transition to Real Estate:
• Michael and his partner David transitioned from trading to real estate to protect and grow their wealth.
• They were motivated by the stability and simplicity of real estate, influenced by Michael's early exposure through his grandfather.
• Investment Strategy:
• Origin Investments focuses on multifamily real estate, particularly in high-growth markets.
• They employ a barbell strategy, balancing preferred equity and ground-up development to manage risk and protect capital.
• Market Insights:
• Michael shared insights on the current state of the multifamily market, noting oversupply in Sunbelt markets like Austin.
• He emphasized the importance of buying below replacement costs and the potential opportunities in distressed assets.
• Risk Management:
• A significant part of their strategy involves understanding and mitigating risks, especially in volatile markets.
• Michael highlighted the importance of having a strong balance sheet and being cautious with leverage.
• Advice for Investors:
• Michael advised investors to look beyond headlines and perform their own due diligence.
• He stressed the importance of trusting and verifying information from sponsors and being cautious of diversification across too many managers.
• Current Opportunities:
• The current market presents opportunities for contrarian investors who can see beyond short-term distress.
• Michael discussed the importance of understanding the motivations behind investment managers' decisions and being wary of strategy drift.

Episode Timeline:

• [00:01:37] Choosing real estate for wealth.
• [00:03:52] Real estate wealth and risk.
• [00:08:10] Distressed capital structures.
• [00:10:57] Multifamily market oversupply and demand.
• [00:13:25] Investing in lifestyle cities.
• [00:17:06] Real estate investment during recession.
• [00:20:44] Looking beyond the headlines.
• [00:24:39] Throwing money into a hole.
• [00:27:23] Due diligence and verification.
• [00:29:38] Diversification in Real Estate Investing.
• [00:33:06] Strategy drift in investments.
• [00:36:15] Managing diverse product mix.