850: Multifamily Experts: Look Out For These 7 “Red Flags” BEFORE You Invest

BiggerPockets Real Estate Podcast

BiggerPockets

Education, Business, Investing

4.8 • 16.5K Ratings

🗓️ 29 November 2023

⏱️ 54 minutes

🔗️ Recording | iTunes | RSS

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Summary

“Want to invest in multifamily real estate, do zero work, and make a million dollars, all in a few months? Well, we have the opportunity for you! We’re about to make you a gazillionaire for the low, low price of your entire life savings. Don’t worry about doing any due diligence; just sign these papers without looking through them. You’re about to strike it rich!” Most people can call out an obvious scam or bad real estate deal, but what about the less-than-obvious signs? Today, we’ve got two multifamily real estate experts, Andrew Cushman and Matt Faircloth, on the show to go through the multifamily and syndication red flags that could cost you EVERYTHING. Andrew even went through the painful process of losing 90% of an investment years ago just to walk through his lessons on the show. Whether you’re partnering on a deal or passively investing in syndications, if any of these red flags show up, you should run—immediately. From vetting a sponsor to investigating track records, which metrics to trust (and which NOT to), and the questions you MUST ask, this episode alone could stop you from losing tens or hundreds of thousands of dollars. In This Episode We Cover: The seven deadly signs that a multifamily syndication deal is a scam (or at least a dud) Vetting a sponsor/syndicator and why you MUST avoid “FOMO investing” Partnerships, inexperienced sponsors, and who you can REALLY trust The new financial “metric” unsophisticated syndicators hope you DON’T look into The “capital stack” explained, and how to do your due diligence on a syndication’s debt (before you invest) And So Much More! Links from the Show Find an Agent Find a Lender BiggerPockets Youtube Channel BiggerPockets Forums BiggerPockets Pro Membership BiggerPockets Bookstore BiggerPockets Bootcamps BiggerPockets Podcast BiggerPockets Merch Listen to All Your Favorite BiggerPockets Podcasts in One Place Learn About Real Estate, The Housing Market, and Money Management with The BiggerPockets Podcasts Get More Deals Done with The BiggerPockets Investing Tools Find a BiggerPockets Real Estate Meetup in Your Area Be a Guest on the BiggerPockets Podcast David's BiggerPockets Profile David's Instagram Rob's BiggerPockets Profile Rob's Instagram Rob's TikTok Rob's Twitter Rob's YouTube BiggerPockets Podcast 636 with Amy Mahjoory (Part 1) BiggerPockets Podcast 352 with Diego Corzo Join BiggerPockets Pro and Start Investing for Financial Freedom TODAY Ask David Your Question Book Mentioned in this Show Pillars of Wealth by David Greene Raising Private Capital by Matt Faircloth The Richest Man in Babylon by George S. Clason: The Hands-Off Investor by Brian Burke Connect with Andrew: Andrew's BiggerPockets Profile Andrew's LinkedIn Vantage Point Acquisitions Connect with Matt: Matt's BiggerPockets Profile Matt's Instagram DeRosa Group Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	This is the BiggerPockets Podcast Show 850.
0:04.0	What's going on everyone? This is David Green, your host of the BiggerPockets Real Estate Podcast.
0:09.0	The biggest, the best, the baddest real estate podcast on the planet.
0:12.0	Today we are joined by two of my friends in the
0:14.6	multifamily space, Andrew Cushman and Matt Faircloth. We're going to be talking
0:18.6	about red flags that every investor should watch out for. This is particularly important in today's market.
0:24.3	Andrew Matt, welcome to the show. David, thank you so much for having us today.
0:27.8	Yep, good to be here as always. And before we get into today's show, I've got a quick tip for all of you loyal listeners.
0:35.5	Sponsors are everywhere and they are looking to get your money.
0:39.0	If you're finding a sponsor that's advertising on social media or even dating profiles that might be a
0:44.4	red flag that you want to look out for. Today's show we're going to go over seven other
0:48.6	red flags to be aware of. Let's get into it. Why are we doing this show right now?
0:54.7	Well, we're seeing operators in the news
0:56.5	getting arrested on charges of investment fraud.
0:59.1	And my gut tells me that as the market gets tougher,
1:02.2	it's gonna be like the tide going out and
1:03.8	you're going to see who's been swimming naked the entire time.
1:06.5	Today's show will be about something that has even happened with our previous guests.
1:10.1	Now we've met our guests to the best of our abilities, but we have had former guests on this
1:13.9	podcast that have gotten in the hot water, and that is why this type of show is so important.
1:18.8	This whole incident is a reminder that no industry is immune to criminal behavior and bigger
1:22.2	pockets will continue
	...

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