Ian Ippolito, Founder and Editor, The Real Estate Crowdfunding Review
The Hidden Risks of Real Estate Crowdfunding
Today’s guest Ian Ippolito, a seasoned investor known for his conservative investment strategies, discusses his take on the real estate market's first significant recession since the advent of real estate crowdfunding.
Ian draws parallels between the initial impact of COVID-19 on multifamily properties and the current challenges facing the office sector. He discusses the office market's decline as a direct result of the remote work revolution leaving a surplus of vacant office space and a swatch of struggling deals, and talks about the impact on multifamily of the end of the rent increase era and the ensuing strain on investment models that failed to anticipate the current trends.
You’ll hear about the importance of taking a conservative investment approach and how fixed vs. floating rate debt and leverage levels measured against value (LTV) are used to protect principal as a priority to the lure of exponential but risky returns.
In light of the recent troubles CrowdStreet has had, Ian talks about the critical role of due diligence for investors even (or especially) when investing via a platform. He reflects on the recent incidents of fraud within the industry, stressing the need for investor vigilance and the responsibility platforms bear in maintaining transparency and integrity.
Offering advice to sponsors, Ian encourages a conservative approach, focusing on long-term survival and stability rather than short-term gains. His message is clear: in a market bracing for a potential massive repricing of assets and grappling with the implications of a high-interest rate environment, prudence is key.
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