James Eng, National Director, Old Capital Lending
This downturn is to multifamily real estate what the 2007+ Global Financial Crisis was to residential
What you are going to hear in my conversation with today’s guest, CRE debt expert James Eng of Old Capital Lending in Texas, is going to make you wonder if we aren’t facing the GFC 2.0 – but this time in commercial real estate, especially multifamily, instead of residential real estate in the post 2007 downturn.
Having done over $2 billion in lending during 2021 and 2022 combined, you will be shocked by the percentage of those loans projected to fall into default without significant new injections of cash, or that could face forced sales, or be foreclosed on by their lenders.
James explains how debt sources shifted from early 2021 in a way that changed lending standards, adjusted loan to value ratios, and competed on pricing that led to, and I’m not sure if he uses the term, but led to a bubble in asset pricing.
Not only that, but you’re also going to learn how these loans get packaged up into tranches that are rated AAA to Bbb, and are then sold off to institutional investors who, in turn and in many cases, then sell them back to retail investors who end up being the final resting place for all risk.
If you’ve not read The Big Short by Michael Lewis, don’t bother. Just listen to my conversation with James today. If you have read it, listening to James is going to get you revved up for the possibilities of being ahead of the curve this time around – and for multifamily real estate no less!
If you want to know how to shore up an existing deal or want to discover where to find multifamily deal flow as pricing resets, this podcast will provide you with guidance on where to look and what to look for.
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