MB464: Is Now the Right Time to Invest?
Financial Freedom with Real Estate Investing
Michael Blank
4.7 • 577 Ratings
🗓️ 24 March 2025
⏱️ 42 minutes
🧾️ Download transcript
Summary
Are you intrigued by the current state of the real estate market? Curious about how drastic changes over the past two years have impacted multifamily investing?
Join hosts Michael Blank and Garrett Lynch as they dissect the whirlwind shifts in the real estate market, akin to a 7 to 10 year cycle compressed into just two years. Today’s episode tackles the burning question: Is now the right time to dive into multifamily investing or should you hold off for a more stable market?
Michael and Garrett kick off the conversation by discussing the importance of adapting investment strategies in line with market cycles, underscoring that timing the market shouldn’t be the primary focus. They delve into how conservative underwriting can shield investors from making costly mistakes, especially in volatile conditions.
Listen in as the hosts explore what has changed dramatically over the past two years, including interest rates, loan terms, and the risk-adjusted returns that investors should be aware of. They also draw parallels to the 2008 financial crisis, offering insights on how the current environment might mirror opportunities seen in the past.
Key Takeaways
- Market Timing vs. Strategy Development
- The pitfalls of attempting to time the market
- Importance of a strategic approach based on market cycles
- Shifts in Risk-Adjusted Returns
- Historic low interest rates two years ago versus the current environment
- How increased interest rates and lowered leverage affect pricing
- Adapting Strategies as Operators
- The need for flexible underwriting and deal management
- Selling and holding decisions based on market conditions
- Multifamily Market Dynamics
- Impact of rapid rate hikes and leverage restrictions
- The forecast of cap rates and their implications for investors
- Strategies for Success
- Importance of conservative assumptions in current deals
- Leveraging past market experiences to predict future opportunities
In this episode, Michael and Garrett provide valuable insights for both passive investors and those looking to actively engage in multifamily real estate. They encourage listeners to assess their investment strategies, considering both the current environment and future market potential.
For more resources and to engage with the hosts on this topic, visit: thefreedompodcast.com. Tune in to explore whether now is the opportune moment for your next real estate investment!
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Resources
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Review the Podcast on Apple Podcasts
Get the Book, Financial Freedom with Real Estate Investing by Michael Blank
For full episode show notes visit: https://themichaelblank.com/podcasts/session464/
Transcript
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| 0:00.0 | Welcome to the show where it's all about financial freedom with real estate. Let's do this. |
| 0:19.9 | All right, today on the show, Garrett and I are basically going to talk about what's going on in the market right now and how it's totally different from the market just two years ago. |
| 0:27.7 | It's almost like we went through an entire seven to 10 year market cycle in the last two years. And why is that? What happened two years ago? How is it different now? |
| 0:34.9 | And is now a good time to get involved in multifamily, or is it |
| 0:38.8 | maybe more prudent to wait? So with that, let's get our co-host here. Garrett Lynch, what's going on? |
| 0:44.4 | What's going on, Michael? This brings up the bigger question, Garrett, is, is it important or should we |
| 0:50.4 | try to time the market? Like, what is your thought on it? Because obviously markets goes up and down. |
| 0:55.9 | Should we try to time the market or should we do something else? |
| 0:58.4 | So I don't think you should try to time the market, but I think you need to create your |
| 1:04.3 | strategy based around where you think the market cycle is. |
| 1:08.5 | For example, if you like generally markets are going up, but there is that case every |
| 1:15.0 | cycle where it does go down. And so you have to pay attention to what kind of products you're in |
| 1:21.0 | on the capital stack side during those times when you think that that could be a downturn |
| 1:25.4 | at some point. How are you positioned to withstand that? |
| 1:29.6 | And the longer you hold on to real estate, the more it's going to go up over time, just like stocks, really. |
| 1:35.9 | But sometimes you're positioned in a way where you can't really hold on. |
| 1:40.3 | So like if you have a short-term loan or something or bridge debt or something variable rate loan |
| 1:44.7 | and stuff like that that's a little more risky than a downturn, you can't really hold on as well. |
| 1:49.9 | And so you should always be buying real estate because there's I remember this distinctly. |
| 1:55.9 | Back in 2015 when I was transitioning out kind of into a new situation out of my old partnership I was |
| 2:04.5 | like everyone's saying oh the cycle's going to it's peaking out this is a really good time you know |
| 2:10.1 | to start over in a year or two years or something and so I actually verbalize that to a couple |
... |
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