Top 3 Multifamily Real Estate Insights – August 14, 2025 Market Update

Critical market updates that you need to know. If you are a multi family real estate investor or your real estate investor at all and you're looking to scale in today's market you've got to pay attention because today I have Randy, my partner here, Larry, my partner, we are diverse in many different aspects but we have a strong focus of multi family apartments and there's some critical things. There's three things I want to walk you through today, August 14, 2025 that I believe if you implement these things, we're going to share three key plays that if you implement these things you're going to do very well in today's market and you're going to be able to be much more recession proof despite what's happening. You know, there's a lot of tension in the, in the market right now. Things like president and, and you know, Russians president, you know, the, the war going on, all different things that could signify different rate increases or drops and all kind of things. So with that we want to focus on the main things, right, because the news is going to tell you all kind of things. But if you're an investor it's critical that you keep your head down and focus on what's going to drive the needle the most. So let's go ahead and kick it off with point number one first update.

Yeah, for sure. Thank you so much Jonathan. Great to be here with you. And it's, you know what Jonathan said, it's true. You gotta, you gotta focus on the underlying facts and realities and not necessarily just grabbing the most recent clickbait on the Internet or the most recent blast on, you know, what's going on on CNBC or some crap, you know, seeing, you know, MSNBC or something like that. And so what you saw coming out most recently was a big movement on the jobs front, right? And on some level they repositioned or restated the jobs down by 225,000 jobs. Like that's not a small number. So that your actual jobs report was like 72,000 and it was a non growth type reality, meaning the jobs market is softening in the US kind of underneath. And now whether that like you know, Trump fired the girl, that's in the statistics realm of the bureau. But whether it's intentional or not intentional, the government does a bad job. But what does that mean for us? Well, you saw the bond market instantly responded in reflection of that indicating a weaker economy than what had previously been said. And that's where you saw, you know, basically like a 30 basis point drop in the treasuries, the 10 year treasury specifically, which drives Fannie and Freddie. But I think ultimately for us. What does that mean? It means that when you look at the economy, you've got to begin to understand that there's some weakening going on within it. There is a pullback in a variety of companies, whether it's executing on capital, hiring, these kind of things. I mean, again, and you know, people I talk with, that's a reality. So what does that mean? It means that if the economy is slowing down a bit underneath, it's more in line with interest rates that have the opportunity to come down because that's really where long term rates are driven from, is from the bond market. And if we sense that there's more uncertainty in the economy, more money rotates into bonds. And so again, they're competing against the stock market. But for us as real estate focused people, we want to see those rates come down. And so there's a balance of like seeing, you know, keeping your eyes on the pulse of it. And then more importantly is seeing the reinstatement figures because that's, that's exactly what happened is they, oh, here it's 300,000. Oh no, it's reinstated. It's only 76,000. So critical to be able to see that and what it means.

So good. Yeah. And I mean, so there's, there's many places around the US A lot of people ask us, you know, where are you investing? Where's the best markets? And look, I, I think it's important that we address that because, you know, there's a lot of reports sharing, you know, the Midwest and all different places that are experiencing more job growth in those areas. But, but really across the nation there are a lot of these deals coming through. And I think that leads us to our next point as far as distressed properties coming, coming onto the market and have already came, you know, people that were in a finance, you know, that with a, with a low interest rate and then they came into a higher interest rate environment. Right. The refinancing options just aren't there. Right. And so people are having to, you know, exit or they're having to sell for less. So there's a lot of opportunities like that coming on. You know, I read investor sentiment has rebounded. Over 80% of multifamily investment pros plan to moderately or aggressively grow their portfolios in 2025. You know, I read occupancy remains strong. You know, rental growth is expected to stay in the 1 to 3% range. But you know, how do you guys feel about just the distressed opportunities and how to capitalize on those, you know, across the nation, not just in the. In the pockets where the news is really focusing on.

Well, I mean, just exactly that you saw this past month, Brookfield Asset Management, they raised six billion dollars of a sixteen billion dollar fund with a heavy focus on multifamily and industrial. And then, you know, Blackstone just bought $2 billion worth of distressed commercial loans. These are not dumb people, right. Like, they are raising a lot of capital or like in Blackstone already have a lot of capital and their focus is exactly in this area. So, you know, what Jonathan just said is the truth is that you've got these capital distress properties that are coming to maturity or already past maturity, and that's presenting opportunity. And so you don't have to go to the Midwest. And I just make a comment on this, right? Like, even on the Midwest thing, you're going to see Midwest, Midwest, Midwest. And you've already seen it now for the last probably 60 days. You're going to see it for another six months to a year. Why is that? Well, Midwest had been more stable, had been more consistent cash flow. People in some areas had been, you know, kind of, you know, pressured and compromised, if you will, in operations. Southeast, Southwest, that kind of thing. Just with some of the things that have taken place there. So steady Eddy in the Midwest, people are rotating there for a bit. They call it stronger cash flow. So now that you've got everybody in the country talking about Midwest, where are people focusing on Midwest? And you go to the Midwest and then that's going to have kind of legs underneath it for the next 18 months. And then what you'll see is these distressed opportunities that are going to be bought and exited on. And then people start, you know, like, oh, my God, hey, this opportunity is over here in the Southeast, Southwest. That shift will come back. It's kind of like Wayne Gretzky said, you want to skate to where the puck's gonna be, not where it is.

There it is.

Yeah. And a lot of people, you know, not only, not only the interest rates got them, but they just overpaid to start with because of the continued optimism that was going, going into the market, thinking cap rates are going to continue to compress. But yeah, the good news is lenders did not loan those people 100% of the purchase price. They only loaned them 60 or 70 or 80%. So while their equity was getting evaporated, you can come in and maybe get it for a Little over the debt. Right. Or for the debt, the amount of the debt. So a lot of opportunities out there in a lot of locations, know where everybody else is not going. Right.

Like, that's good, that's good. You know, and I was just reminded that, quote, Warren Buffett said, if you were to promise me that next year there's going to be a depression, there's going to be a tank in the market, if you were to guarantee that I would still be investing in the same assets and selling same securities I'm selling right now would not change a thing. And so I think it's important for a lot of investors to see that there's, there's a lot of these opportunities coming. So you've got to navigate with the market. But the multifamily value add is just such a, you know, especially the 10 to 100 unit range. It's just a massive opportunity that you got to keep your head down, keep focused on. And, you know, I was just reading there's even smaller groups are now doubling their portfolio because of the opportunities. These distressed properties, you know, they're looking for loans being matured and, and sellers that are owners that, you know, the deal has been delayed or it's been, you know, in distress. And, you know, people are able to grow quickly if they can really identify these opportunities and they're looking for that. So, yeah, big, big point right there. And just so people know, you know, the loans, multifamily loans are maturing, meaning now they're due, and the lender has the ability to increase the interest rates to the current interest rates. And so, you know, people underwrote the deal thinking it was going to come down. And, you know, a lot of people think, well, Trump's going to decrease rates in May and, and probably will. Right. And that's great news. But we don't underwrite, we don't count on that. Whenever you're looking at multifamily deals, you, you focus on, on value add, appreciation, forced appreciation, and that's what is really the safe bet. That's really what we need to be focused on right now. So let's move to point three.

Yeah, I mean, I think too, you see what has been the underlying reality of inflation moderating in the most recent inflation report that just came out on Wednesday. And that also was where, you know, the confidence level of a rate cut for September skyrocketed to, you know, over 90%. Meaning it's like the Fed has clear reason to begin cutting rates now. You've got jobs that are weakening, as evidenced by the jobs report that we talked about. And now you've also got kind of all the tariff stuff going on and inflation has not moved as what they expected. And so that is a great bellwether right there that we have to pay attention to. And then the reality is, as I think Larry said, yeah, the rate cuts are on the horizon.

Yeah, yeah. And that's exciting. Yeah. Most likely next month. Right. We'll get an, another cut, which will create opportunity. But you know, the, the best, the best investors have the key ability to see what's coming. Right. I mean, the, the people that are highly successful, they have a vision to be able to see what's coming. And you know, a mentor of mine said, told me a long time ago to create my own economy, don't worry too much about what's going on in the national economy. But you have to have knowledge and you have to understand the bigger picture, obviously, to be able to have that vision of what's coming. But you know, you have, you have rates coming down and that creates the ability to go out and take down deals and plan your, your underwriting and buying the deal based on those rates.

Yeah. And I mean, there's a reality that, and again, you don't, you know, again, Larry just spoke very aptly, but you know, you've got meetings coming up. There's three meetings left for the Fed this year. September, October, December. And you know, there's a possibility and, or some would say a probability that there could be rate cuts at all three meetings. Now again, it's going to be distinguished on what transpires in the underlying data, continuing with inflation and jobs numbers. Those are going to be big drivers because also Jerome Powell doesn't want to look like a whipping boy from Trump. Right. I mean, trust in riding his butt about, you know, cut, cut, cut, cut, cut. Fire him fast and fire them soon if I can. And then now what, you know, Powell is going to be balanced with.

Right.

He's gotta, you know, pretty much gotta cut rates next month in September. But then, you know, if he's being reasonable and, and, you know, fair, there's really data that could support October and then depending on what shakes out between next couple of months, December as well. And so that would, that, that would be awesome.

I mean, now could potentially have three more could potentially have three rate cuts, right?

Yeah.

I mean, he's not going to cut by 50 basis points in September. I mean, it's probably 25 because the market would overreact. But you know, that would be Great, man. I mean, 75 or even 50 basis points between the end of the year, dropping from four and a quarter to three, seven five. That's, you know, that's a good move. And it helps on bridge loans. It helps psychology. Jonathan mentioned investor psychology. Like, buyers start like, hey, coming down. You know what I mean? And so, yeah, I mean, a lot.

Of people are just in a holding pattern.

Right.

And it's not any for a lot of the reason. It's just the sentiment. Right?

Yeah. Well. And I would say this capital, even equity people are, let's wait and see. It's like now is the time to begin to move forward because you can underwrite the deal. And like what Jonathan said, quote from Warren Buffett, hey, this deal works at the numbers right now at this rate. And so you make money with the value add proposition with this rate. And then as rates would come down, you're then doing even better, you know. But it's not predicated on, I've seen some deals floating around on the Internet and it's like they're basing it on, hey, we're going to make money by the rates going down. Right. You know what I mean? And it's like, well, if rates don't come down that quickly, you're, you're kind of screwed, man. It's like, you know, so you should have learned from what Larry said about buying thin and 21 and 22 when rates went up. Like, you don't want to buy thin now if rates stay stable. But that could happen. You know what I mean? Like, it's like, you don't want to be like, oh my God, rates have got to come down in the next 12 months and I'm crushing it. So I got some added bonus.

Yeah. And I mean, so whether your strategy is expanding your portfolio or shoring up or trying to, you know, keep your returns consistent or maximize returns, you need to understand these market cycles and how these things take place because there's so many opportunities. But at, at the same time, if you are expecting something that's not going to happen or may happen, you could find yourself in the same situation that's created the opportunity right now. And that's people that are coming, their, their loans are coming due and they aren't prepared for it. Right there. Aren't prepared for the current market interest rate. So you got to understand these things. And so, you know, I love. Drop in the comments on this video, drop in the comments where you're investing, what your strategy is, what are you, what Are you currently doing, Are you refinancing? Are you, how are you approaching deals right now, Randy? Larry, I'd love to hear for those that are watching and want to be aggressive in acquisitions, want to get out there and take deals down in today's market. How are you, how would you advise them to focus with the upcoming situation in the government?

I mean, I would say two things. One, you've got to have a focus on operations. 100%, no doubt. Right. Like, and whether it's your first deal or your 10th deal, you need to be able to be focused on operations. Because I've said this time and again, this is going to be the decade of operations, you know, and what I mean by that is it's a tighter environment. Anybody that tells you they haven't experienced pressure in commercial real estate in the last three years is either lying or stupid. Or maybe they own one deal that they babysit for the whole time with a fixed rate loan of 4%. Apart from that, operations matter because you've got, like Jonathan said earlier, there was more supply coming in the market last year. Rents were not as strong in many markets. You've got interest rates that were up so dramatically so quickly in 2223. So having operations dialed in is key. And then also being able to be focused on what is your acquisition focus. Like, not just going after anything and everything, but having a particular focus that makes sense for you and you and your team can execute on it. That's key. Execute on it. So those two things are going to be critical because, like, look, you go out and buy three deals because you're executing on acquisitions, but you don't have operations to support it. That's going to be a challenge. And, or, yeah, you know, if you, you know, focus on trying to get everything, you usually get nothing.

Yeah, and we're, you know, we're, we're focused heavily on operations. We're still in the acquisitions game, but somewhat in that waiting mode. But if you're, if you're in heavy acquisitions mode, you have a huge advantage because a lot of people are on the sidelines, a lot of people, because they have to be on the sidelines, but some they're waiting. So, you know, now you know where rates are, you know, where the economy is. It's been pretty consistently not good for a while now. So, so you've got, you know, and rates probably are, I don't know if they'll ever come back to three and a half percent. And you know, for long term debt in my lifetime, probably Gonna be in the fives or sixes, right, Randy? You know, so you can act accordingly. And you have the opportunity to get in there on deals now, you know, if we're realistic, the deals we're making offers on, there's a lot fewer buyers, a lot less competition, or also there's a bigger spread from what the seller wants and what we can pay. But there's still some that work. So you got to get out there and you know, network your tell off, right? Whether you're looking for distressed super deals from a bank or whether you're looking from a direct to seller who's maybe he's been out of the country, you know, been away for 10 years and doesn't know what's going on and you can scoop up a good deal. And some people just gotta sell because they've gotten, you know, they just gotta sell. They gotta take what the market will bear. You know, they can't. You can hope and dream for a certain price all you want, but you're only gonna get what the market will bear, right?

I would echo this too. The leprechaun from the Lucky Charm cereal box is not going to skip in and just drop a deal in your lap. You know what I mean? Like, you've got to take the effort and energy, like Larry said, with the focus on what you're going after and get out there and do the work to find it. Right? Because even if it is, say there's distressed properties coming in. Look, we had four come in through our network the past day or so and probably three of the four were trash, right? Like, I mean, yeah, they're distressed, but they're no good. And so, you know, again, you get on the Internet and you, you know, it's like the little fairy dust is going to sprinkle gold onto you and you're just going to have it fall in your lap. It just doesn't happen that way. So, you know, you got to gear up and get out there and like Larry said, you got to do the work and you got to kiss a lot of frogs to find a prince, man. That's just, that's the truth. You know what I mean?

And so that's good.

Got to do the work.

Look, and you're ahead of the game. You're. Yeah, get the game. Right.

You know, a friend of mine told me this, this good friend of mine, real estate attorney, high level investor for 40 plus years, real successful guy. He was probably one of my first guys that I bought a multifamily with in 2003 and we connected and when going through the crash of whatever, 2008, 9, 10 kind of era, and we're just, man, we're working through it and banging through it and going through it. He said him and I met, you know, regularly, he said, randy, you're going to be light years ahead of everybody else. Because at that time it became so difficult, most people just kind of pivoted away from real estate, you know. And he's like, by you doing the work and moving through a lot of these challenges and difficulties that exist in the market, when the market comes back, and it will come back because it always does, you're going to be so far ahead of everybody else because they're going to be coming back where you already been in it and you've been sharpening your skills through it. And he was true and right. And I would say the same thing, and it echoes what Larry said is by you putting in the work right now, even if it doesn't appear fruitful, meaning you got a deal out of it, you're still sharpening the skills and you're going to be light years ahead of other people that are just sitting back so good.

Look guys, if you are serious about growing in real estate, growing in multifamily, this is the year, this is, this is the time. August 14th. This is the time to be investing. I mean right now you're seeing a, the, the supply is thinning out. You know, there's very tight supply now. So rent growth is growing. You know, we have a lot of opportunity with distressed opportunities, distressed value add apartments, you know, loans coming due and really just, you know, the big beautiful bill. Right. We haven't even talked about that. But you know, that's something that we'll talk about for another time is, you know, Trump made this tax bill that now, now you can get a hundred percent bonus, depreciation, you know, you get a five million dollar deal, you're able to do a cost seg study and write off a million dollars on your, on your taxes. Right? So you say I don't even need that. Well, it does roll over a lot of times into years to come. So, so I mean, look, this is a monumental opportunity to be in multifamily. And so if I would love to hear in the comments, if you're focused on, on growth, love to hear it. You know, let us know. We'd love to support you however we can. We actually have a live master class coming up Saturday. We're going to be doing a, a master class at 12pm Eastern time this Saturday in a couple days. So it's completely free. We're going to be hosting a training. So if you want to jump on that, go, I'll, I'll drop a link in the description for you. Just go ahead and opt into that and, and we'll see you on there. But we're going to be walking through exactly how to find these deals, find off market deals, how to get them funded, how to bring capital partners on, how to structure these deals, all that kind of stuff. We'd love to see you there. But either way, appreciate you guys joining. And it's been a been an awesome time. So thanks, Randy and Larry.

Thank you.

Thank you, Jonathan. Good to see you, Randy.

Good to see you too, buddy. Take care now.

All right, guys, God bless.