Invest Like a Billionaire Deals We Didn't Do: The Rise of Pref Equity and when to Run like Hell
Jul 1, 2025
Discover how investment leaders decide which deals to pursue and which to pass on. Learn about the critical red flags in private credit deals and the challenges of navigating high-interest rates. The discussion sheds light on the discrepancies between optimistic rent growth projections and harsh market realities. Explore the shifting dynamics of cap rates and potential opportunities in prime markets, along with the unique challenges in multifamily real estate. This insightful dialogue emphasizes the need for thorough analysis and cautious strategies.
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Beware Rescue Preferred Equity Funds
- Rescue Preferred Equity Funds often hide poor deals by disguising struggling assets as good private credit opportunities.
- Investors should watch out for funds primarily designed to repay sponsors' debts rather than generate real returns.
Strong Assets Can Still Fail Financially
- Multifamily projects can fail financially despite high occupancy and good conditions if debt and deal structures are poor.
- Raising new capital to cover old losses harms investor trust and the alternative investments reputation.
Check Acquisition Dates
- Always analyze acquisition dates to check if assets were purchased at market peaks.
- Avoid funds buying at the top; it often signals overpayment and risk for new investors.