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The David Greene Show
Multi Family Bloodbath - Episode 13
Oct 17, 2024
Andrew Cushman, a multifamily real estate investor with a background in chemical engineering, dives into the tumultuous world of multifamily investments. He reveals the harsh realities of the current market, where many passive investors face significant losses. Cushman breaks down essential concepts like NOI and cap rates, explaining how rising interest rates are reshaping property valuations. He shares insights on navigating capital calls and the importance of thorough vetting in syndication deals, offering valuable lessons for aspiring commercial investors.
01:13:25
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Quick takeaways
- The multifamily real estate market is facing significant challenges due to rising interest rates, leading to negative cash flow for many operators.
- Investors must exercise caution and thoroughly vet operators, as trust in their expertise is crucial for the success of multifamily syndications.
Deep dives
Understanding Multifamily Syndications
Syndications allow investors to pool resources to participate in larger real estate deals that would be unattainable individually. This structure enables limited partners to invest in substantial assets, such as 200-unit apartment buildings, without the need for personal involvement in management or administrative duties. The operator is responsible for acquiring the property, running it, and eventually selling it, distributing profits to investors. It is crucial for investors to trust the operator, as their expertise significantly influences the success of the investment.
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