JF3823: Multifamily Market Cycle Insights, Investment Strategy Shifts, & International Real Estate Capital Flow Analysis ft. Reed Goossens
Feb 21, 2025
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Reed Goossens, head of RSN Property Group and a veteran with over $900 million in syndication, shares his wealth of real estate insights. He discusses navigating the multifamily downturn and closing five deals despite challenges by leveraging positive debt. Goossens highlights distressed investment opportunities and the increasing interest of foreign investors in the U.S. market. He also recounts his transition from engineering to real estate syndication, providing valuable advice for new investors seeking to adapt to today’s landscape.
Navigating the multifamily downturn requires investors to focus on positive leverage and seek distressed opportunities to close profitable deals.
The transition from construction to real estate syndication emphasizes the importance of project management in asset management and deal execution.
International investors are increasingly attracted to the US real estate market due to its stability and potential for reliable returns amidst economic fluctuations.
Deep dives
Investment Opportunity in Mobile Home Parks
Investing in mobile home parks presents a lucrative opportunity due to their recession resilience and stable income potential. The average tenant in a mobile home park remains for 10 to 12 years, significantly higher than the turnover rates seen in multifamily housing. Additionally, the depreciation benefits for owners enhance tax advantages, making these investments attractive even amidst economic downturns. With the demand for affordable housing increasing, mobile home parks are positioned to offer reliable returns regardless of market fluctuations.
Key Investment Strategies
Understanding the fundamentals of investing, especially in the context of current economic conditions, is crucial for success. Investors should focus on acquiring properties with positive leverage, ensuring paths toward fixed-rate debt, and realistically assessing rent rolls in light of the end of stimulus measures. The current landscape demands a practical approach that considers the affordability challenges faced by blue-collar tenants. Adopting these strategies is essential for navigating the complexities of today's market.
Shifting Market Dynamics
The commercial real estate market has undergone changes due to rising interest rates, leading to a shift in transaction volumes and the availability of distressed properties. Many investors who previously enjoyed favorable financing conditions are now facing challenges, with some considering exiting deals altogether. The conversations among industry professionals reveal a mix of cautious optimism and wariness regarding future deal flows. As banks begin to adjust their strategies, opportunities are becoming available, albeit selectively.
Leveraging Previous Experience
Transitioning from a project management role in construction to real estate syndication has provided valuable insights into property management and deal execution. Those with backgrounds in development understand the intricacies of managing projects and coordinating with various stakeholders. This experience can streamline the operational process for existing multifamily deals, reducing complexities and enhancing oversight. It's essential to apply construction management expertise to ensure successful asset management and construction oversight.
Future of Real Estate Investment
The long-term outlook for real estate investment remains cautiously optimistic despite recent turbulence in the market. Many successful transactions involve acquiring assets at reduced prices due to external economic pressures, allowing savvy investors to capitalize on opportunities. A significant portion of real estate remains backed by stable financing, which can mitigate risk during downturns. Staying informed and strategically plugged into the local market landscape will be vital for investors looking to thrive going forward.
On this episode of Next Level CRE, host Matt Faircloth interviews Reed Goossens, head of RSN Property Group and veteran of 27 syndications totaling over $900 million in transactions. Goossens shares insights on navigating the current multifamily downturn, including how his firm closed five deals over the past two challenging years by focusing on positive leverage and agency debt. The conversation explores distressed opportunities emerging in the market, lessons from both successful and challenging deals, and why international investors are drawn to US real estate investments. Goossens also discusses his transition from structural engineering to real estate syndication and offers practical advice for investors entering today's market.