BiggerPockets Real Estate Podcast

876: Huge Opportunity for New Multifamily Investors As Prices Set to Drop w/Brian Burke and Matt Faircloth

Jan 22, 2024

Multifamily real estate market facing challenges with high bid-ask spreads and declining prices. Brian sees a 'day of reckoning' with low-interest debt coming due, while Matt remains optimistic. They discuss navigating decreasing property values and offer advice for entering multifamily market. Also, they share company plans for 2024 and importance of managing downside risk.

44:05

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Episode guests

Matt Faircloth

Brian Burke

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Episode notes

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Quick takeaways

Prices in the multifamily market have dropped, creating risks and potentially opportunities for investors.

Building strong business systems, investor bases, and broker relationships is important in the multifamily market in 2024.

Deep dives

The state of multifamily in 2024

The multifamily market in 2024 is facing different conditions than the residential market. Prices in the multifamily market have dropped by 10 to 20 percent depending on the location, creating risks and potentially opportunities for investors. The experts suggest that there were challenges in 2023 with a bid-ask spread between buyers and sellers causing difficulties in getting deals done. However, there is some disagreement about whether the market peaked in 2022 or 2023. The cost of money, specifically interest rates, has also increased, impacting the numbers and making it harder for deals to pencil out. The speakers recommend focusing on market niches and building relationships with brokers to find potential opportunities.

Introduction

2min

Challenges and Market Conditions in the Multifamily Market

6min

Debt Pricing and Sponsor Ads

3min

Analyzing the Real Estate Market and Factors Affecting Deals

18min

Differing Perspectives on the Future of Real Estate

6min

Navigating the Impact of Decreasing Property Prices

7min

Future Plans and Investment Strategies

3min

Multifamily real estate has crashed, but we’re not at the bottom yet. With more debt coming due, expenses rising, incomes falling, and owners feeling desperate, there’s only so much longer that these high multifamily prices can last. Over the past year, expert multifamily investors like Brian Burke and Matt Faircloth have been sitting and waiting for a worthwhile deal to pop up, but after analyzing hundreds of properties, NOTHING would work. How bad IS the multifamily market right now?

Brian and Matt are back on the podcast to give their take on the multifamily real estate market. Brian sees a “day of reckoning” coming for multifamily owners as low-interest debt comes due, banks get desperate to be paid, and investors run out of patience. On the other hand, Matt is a bit more optimistic but still thinks price cuts are coming as inexperienced and overconfident investors get pushed out of the market. So, how does this information help you build wealth?

In this episode, Brian and Matt share the state of the 2024 multifamily market, explain exactly what they’ve been doing to find deals, and give their strategy for THIS year that you can copy to scoop up real estate deals at a steep discount. Wealth is built in the bad markets, so don’t skip out on this one!

In This Episode We Cover:

The state of multifamily real estate in 2024 and how low prices could go

A “day of reckoning” coming for inexperienced/overleveraged multifamily owners

Whether or not we’ve reached the bottom for multifamily price drops

What rookie real estate investors should do NOW to take advantage of this down market

Rising mortgage rates and how increased costs have KILLED many multifamily deals

Exactly what Brian and Matt are investing in during 2024 to make money no matter how the market moves

And So Much More!

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