BiggerPockets Daily Equity vs. Debt: What Part of the Equity Stack is Right For You?
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Feb 1, 2025 Whitney Hutton, an insightful author focused on real estate investing, explores the balance of equity and debt in capital stacks. She emphasizes the importance of diversification to mitigate risks like inflation and interest rate changes. Hutton shares practical insights on navigating these financial components to achieve sustained investment success. Hear compelling client stories illustrating how different strategies can yield varying risk-return dynamics across market cycles.
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The Capital Stack
- Diversification is important in real estate investing, but it's not just about markets and asset classes.
- It's also about how you invest, balancing equity and debt in your portfolio.
Equity Risk
- Diversifying across markets and operators isn't enough if all investments are equity-based.
- Inflation and rising interest rates can still negatively impact your entire portfolio.
Multifamily Syndication Example
- Imagine investing in equity deals in Dallas, Phoenix, and Charlotte.
- Despite market diversification, rising costs and interest rates would impact all three investments.