CRE & Rising Interest Rates with Adam Finkel

Published: Feb. 23, 2023, 8 a.m.

b'As the Federal Reserve is expected to keep interest rates elevated through 2024, investors face challenges as they come out of loan periods that began when the market was high, and cap rates were low. This has caused transactional velocity and financing costs to go up, potentially creating a housing undersupply issue. Adam Finkel shares his experience investing in commercial real estate, providing insight into debt and equity markets and how lenders deal in this current market cycle. He also advises finding the best capital sources, bringing more equity, looking for different equity sources, and focusing on deals with longer-term time horizons. Listen to this informative episode to learn more about what lenders look for when considering an investment, how to act with integrity when conducting business, and what investors should consider when matching their financing to their time horizon.\\n\\xa0\\n[00:01 - 06:58] Dealing with Rising Interest Rates in Commercial Real Estate: How Investors are Adapting to the New Market Cycle\\nInterest rates have been kept low by the Federal Reserve to support a healthy economy\\nThe Federal Reserve has recently increased interest rates to fight inflation\\nBanks and private equity groups are having a hard time valuing assets\\nInvestors are dealing with higher rates by bringing more equity to the table or looking for different equity sources\\n\\xa0\\n[06:59 - 15:30] Investors Face Challenges in a Changing Interest Rate Environment\\nInvestors are facing challenges due to the current market environment.\\nOptions for those with loans coming due include bringing equity, getting a lower-leverage loan, or adding a supplemental loan.\\nThose with variable interest rate loans can look to lock in fixed-rate debt\\nThe Federal Reserve is expected to continue increasing rates through spring and potentially into 2024\\n\\xa0\\n[15:39 - 24:53] Commercial Real Estate Investing: Risk and Reward in an Era of Reduced Liquidity and Increased Focus on the Sponsor\\nCommercial real estate as an asset class has become riskier\\nWhen investing, return is always a balance of risk and reward\\nDevelopers are finding it challenging to find capital for their projects\\nWhen looking at a business plan or underwriting package for a new acquisition, lenders focus on the sponsor\'s experience, market studies, net worth, liquidity, and team members\\nLenders are looking at the borrower and not just the property when assessing a loan\\n\\xa0\\n[24:54 - 31:13] Closing Segment\\nThe best investment was a value add a multi-family project with a 3.5x return in 2.5 years\\nThe worst investment was in a condominium fix and flip with an inexperienced partner\\nSee the links below to connect with Adam\\n\\nConnect with Adam through www.TowerCapLLC.com and adam@towercapllc.com.\\xa0\\n\\xa0\\nInvest passively in multiple commercial real estate assets such as apartments, self-storage, medical facilities, hotels, and more through https://www.passivewealthstrategy.com/crowdstreet/\\nParticipate directly in real estate investment loans on a fractional basis. Go to www.passivewealthstrategy.com/groundfloor/ and get ready to invest on your terms.\\nJoin our Passive Investor Club to access passive commercial real estate investment opportunities.\\nLEAVE A REVIEW + help someone who wants to explode their business growth by sharing this episode or clicking here to listen to our previous episodes.\\n\\xa0\\nQuotes:\\n"The old adage of \'real estate, location, location, location\' now it\'s really sponsor, sponsor, sponsor." - Adam Finkel'