While I am traditionally a very risk averse investor, I recognize that there are tremendous rewards for taking risks, and I believe that those willing to step out and take calculated risks in 2024 will be handsomely rewarded.
The deals done over the next 12 months may not look like your traditional multifamily deals of the past, but there are certainly discounts to be had, and plenty of problems to solve.
When using debt, there are enhancements and tactical choices that can be made to improve the risk-return profile of your deals. Having a detailed understanding of the debt market will allow you to choose the best debt product, with the right enhancements, provided by the best partners to work with.
2023 has been a difficult year to find new real estate investments, and the market is struggling to reach price discovery amongst rapidly changing market conditions. 2024 may be the time to start looking for opportunities that others may be overlooking.
We are seeing many capital calls being made to investors, where sponsors are asking investors for additional capital to buy more rate caps, for cash-in refinances or to fund other aspects of the investment.
In a situation where investors are being asked for additional capital on multiple investments, it can be difficult to make a decision on which projects, if any, new capital should be provided.
So what should passive investors ado in the current situation?
The world we live in today is highly interconnected, overly political and therefore excessively complicated. In contrast, real estate is a long-term investment and a relatively straightforward business.