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In this podcast, host Josh Appelman interviews Neil Bawa, a data scientist and real estate investor. Neil discusses his background and his interest in using data science to revolutionize the real estate industry. He also talks about his successful portfolio, which includes over $1 billion in assets and thousands of investors.
The main topic of discussion in the podcast is the impact of debt and equity on real estate valuations and financing. Neil explains that as interest rates have risen, cap rates (the rate of return on investment) have also increased. This is because higher interest rates make it more difficult for investors to finance their purchases, leading to lower prices and higher cap rates. This trend has been seen across the United States in various asset classes.
Neil offers two options for financing deals in this market. One option is to choose a five-year fixed-rate loan, which allows investors to hold their property for the duration of the loan and then sell it at the end. The other option is to assume an existing loan, which is particularly common for properties that have assumable loans. Neil also mentions that he expects bridge loans to become more common again in the future, potentially as early as next year. He suggests keeping an eye on market data to track potential changes in interest rates.