Neal Bawa, CEO of Grocapitus – The Future of MF Investing, Being a Data-driven Investor & more

Aug 30, 2023

Neal Bawa
This podcast guesting of Neal Bawa is hosted by Steve Nabity and Jake Prieur of Heading West.
Heading West is sponsored by Skyline Point Capital – a real estate investment company focused on investments in multi-family apartments in some of the fastest-growing cities in the United States. We’re unlocking passive cash flow at scale, and living life a little differently. Invest alongside us and join us on the journey as we HEAD WEST.

Show notes:

3:30 – Neal’s take on the market and investor sentiment

5:00 – The stock market is tied to investor psychology

5:45 – The FED is slowing down and may have hit a plateau

6:00 – 2023 investor market is tied back to 2022

7:00 – Investors think they’re investors, but they’re really speculators

8:15 – Multifamily properties have dropped 22-26% in value

9:30 – Every investor in multifamily over the last 24 months thought they were gold

11:15 – Investors are making the mistake to not invest when things are down

13:00 – Investors are getting smarter about their underwriting

14:00 – In the money rate caps

16:00 – Many banks don’t want you to foreclose

17:00 – Where will interest rates go over the next few years

18:00 – 2026 will look like 2019

18:30 – The FED only started hiking in 2015

22:00 – Not likely to see cap rates drop significantly

23:15 – I’m more worried about disinflation, not inflation

24:30 – More deals are not closing than are closing

26:00 – The bid-to-ask ratio is always too high!

31:00 – There has to be capitulation between buyer and sellers

32:00 – 2023 has seen negative rent growth

32:30 – Rent growth has to be inflation-adjusted

33:30 – It’s normal for rent growth to be 1.5% above inflation

35:00 – Rent growth was so high last year because they had more money

36:00 – Newly constructed apartments are keeping rents low for others

41:00 – Interest rates have nothing to do with rate caps

42:15 – Rate caps will be cheaper next year in Q2 or Q3

44:00 – Cap rates won’t compress for a while

46:30 – Very few options if your rate cap expires in 2023

49:00 – Will the office space crash affect multifamily?

50:00 – Condo prices get affected first when office spaces get hurt

52:15 – The benefits of build-to-rent investing

53:30 – Why can’t people afford homes anymore

56:30 – BTR allows people to live in the next best thing to a home

58:15 – Property taxes are the 800lb gorilla for apartment NOI

1:00:30 – Location Magic

1:01:00 – Insurance is growing 15-30% each year

1:02:15 – Insurance companies prefer new builds

1:03:00 – Listen to Warren Buffett!