359. You Think Apartments Are a Safe Investment?

Key Takeaways:

Multifamily Isn’t “Safe” Anymore

The old playbook—buy, renovate, raise rents, refinance—worked when you had margin. Today’s compressed cap rates and higher debt costs leave almost no room for error. When everything has to go right, that’s not safety.

Competition Changed the Game

Institutional and out-of-state capital flooded major markets. Local operators who once competed with familiar players suddenly faced groups willing to pay far more—and accept thinner returns.

COVID Exposed the Fragility

Eviction restrictions and drops in economic occupancy crushed cash flow. When 20–30% of tenants aren’t paying, the model breaks. Debt coverage becomes the priority, not growth.

Expenses Are the Silent Killer

Insurance and property taxes have skyrocketed. Even strong operators can’t out-operate doubling insurance premiums and massive tax increases.

Timing Matters More Than Ego

Josh exited residential in 2018, before the cracks became obvious. Capturing 4x–7x returns and redeploying capital was a strategic move—not an emotional one.

Commercial Offers Control and Predictability

Fewer tenants. Longer leases. Less day-to-day “firefighting.” In many smaller commercial deals, there’s less competition and more ability to plan long-term capital expenses.