BiggerPockets Real Estate Podcast

967: BiggerNews: Apartment Investing Took a Huge Hit, Is a Comeback On the Way? w/Brian Burke

Jun 7, 2024

Brian Burke, who predicted the downturn in apartment investing, discusses the challenges faced by investors in the multifamily market. He highlights the impact of rising interest rates, stalled rent growth, and oversupply on the industry. Burke offers insights on when to sell properties and shares a hopeful prediction for 2025. Topics include market trends, real estate investment strategies, and navigating syndication investments.

38:32

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Episode guests

Brian Burke

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Episode notes

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Quick takeaways

Foreseeing market trends is crucial for successful real estate investments.

Multifamily investors should evaluate their capital structures for long-term sustainability.

Despite current challenges, long-term prospects for multifamily investments are positive.

Deep dives

The Root of Negative Sentiment in Commercial Real Estate

Negativity towards commercial investing in multifamily assets has emerged recently due to factors like irrational exuberance among investors and renters. This sentiment started pre-COVID, with rents steadily increasing and investors eagerly buying into multifamily assets. Simultaneously, developers began capitalizing on the high demand, leading to a surge in apartment pricing and rent hikes. Post-COVID and amid inflation concerns, these dynamics collided, resulting in escalated rents and challenges for both investors and developers.

Intro

2min

Irrational Exuberance in the Apartment Market

9min

Real Estate Investment Strategies and Challenges

5min

Apartment Investing Trends from 2017 to 2022

10min

Uncertainty in Interest Rates and Real Estate Market; Implications of Multifamily Housing Slowdown

7min

Long-Term Housing Investment Outlook and Advice on Syndication Investments

4min

Navigating Multifamily Investing and Syndication

3min

Almost overnight, multifamily investing went from red-hot to something not even the most experienced investors would touch. After interest rates went up, rent growth stalled, and apartment supply flooded the market, the apartment investing industry became the ugly duckling of real estate. Owners struggled to get tenants and had huge balloon payments due, and no one was there to save them. But one man predicted that this would happen before anyone else—Brian Burke.

After seeing a crash on the horizon, Brian sold off most of his multifamily real estate portfolio and did it at just the right time. Now, he has a new prediction that could make apartment investors very happy. But a market turnaround won’t come quickly, and if you want to ensure you don’t make the same mistakes most multifamily investors made in 2020 - 2022, you’ll need to hear this BiggerNews episode.

In this BiggerNews, Brian walks through everything that went wrong with multifamily real estate, signs it’s time to sell your properties, and some hope on the horizon for 2025 that most investors have no idea about.

Support today’s show sponsor, Rent App: the free and easy way to collect rent!

In This Episode We Cover

A multifamily real estate update and Brian’s buying plans for 2024 and 2025

The “sobering reality” of the perfectly timed “traffic accident” that hit multifamily all at once

Why as soon as you sense “irrational exuberance,” it may be time to sell your real estate

An optimistic prediction from Brian on when multifamily could finally get back on its feet

Syndication struggles and what every syndicator/investor should be doing NOW

Why the multifamily oversupply may NOT be a problem in the coming years

And So Much More!

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