PassivePockets: The Passive Real Estate Investing Show

J Scott’s 2026 Playbook: Inflation, Rates, and Where Real Estate Wins

10 snips

Dec 16, 2025

In this insightful conversation, J Scott, a seasoned investor and author known for his expertise in real estate, shares his key takeaways from 2025 and what to watch for in 2026. He highlights the surprising resilience of asset prices amid inflation and construction delays. J prioritizes needs-based real estate and small multifamily markets as promising investment areas. He cautions against office and retail sectors while discussing the impacts of immigration policy on labor costs. Dive into J's strategies for navigating the current economic landscape!

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INSIGHT

Tariffs Still Lifting Inflation

Tariffs created a one-time inflation shock that hasn't fully shown up in official data yet.
J Scott warns tariffs likely add several tenths of a percent to inflation for now.

INSIGHT

Multifamily Is Deeper In Recession

Multifamily saw a deep correction since 2022 with cap rates peaking and rents largely negative until recently.
Transaction volume remains low due to a gap between seller price expectations and buyer willingness.

ADVICE

Invest Where You Have Conviction

If you lack conviction across public markets, favor investing where you invest your time and capital, like your own sponsor deals.
J Scott is deploying personal cash into his 351-unit Dallas ground-up development with aligned conviction.

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Jim Pfeifer and Chris Lopez sit down with investor and author J Scott to recap 2025 and map out what LPs should be watching in 2026. J shares where the year defied expectations (supply, rates, and “real” distress), how he’s positioning for a higher-for-longer rate regime, and the simple filters he’s using to decide between equity and credit today. The conversation covers underwriting discipline, liquidity planning, and why needs-based real estate and inefficient small-multifamily niches may offer the best risk-adjusted plays right now—if you partner with true specialists.

Key Takeaways

2025 reality check: distress was uneven and narrower than headlines; construction delays kept deliveries elevated longer than expected

Rates vs. cap rates: in higher-for-longer, appreciation must come from income growth and operational upside—not cap rate fantasy

Allocation: build durable cash flow with selective debt strategies while reserving dry powder for high-conviction equity dislocations

LP playbook: diversify by sponsor and strategy, avoid tax-driven decisions, and stress test for flat/negative rent growth and refi risk

Where to hunt: needs-based real estate (e.g., senior/medical/data) and imperfect small-multifamily markets where operator edge matters

Operator diligence: prioritize track record, reporting, and downside plans; verify fee alignment and who truly controls execution

Disclaimer

The content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk, so use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose. Past performance is not indicative of future results. This podcast may contain paid advertisements or other promotional materials for real estate investment advisers, investment funds, and investment opportunities, which should not be interpreted as a recommendation, endorsement, or testimonial by PassivePockets, LLC or any of its affiliates. Viewers must conduct their own due diligence and consider their own financial situations before engaging with any advertised offerings, products, or services. PassivePockets, LLC disclaims all liability for direct, indirect, consequential, or other damages arising out of reliance on information and advertisements presented in this podcast.