YouSaid · the spoken record

Patrick Carroll

lines on the record: 49
first: 2023-01-20
most recent: 2023-01-20
sittings or episodes: 1
sources: podcast

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“To see the kids' reactions and everything like that, I decided to do it in nine more cities. So we're doing a total of 10 cities, a million dollars worth of shoes. And to me, that's just, it's about as rewarding as it gets. So I think between giving away financially and just giving away information, it's a big focus of mine. I think the world needs it and it's very important to me.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Almost immediately. I mean, you know, again, I think I've always been pretty humble. And, you know, just be in a position to be able to give back to help people is, you know, hugely important to me. I'd say I dialed it up more so when I had children, my sons, I wanted them to see that this is a big part of my life and that this is very important. You know, my main cause that I focus on is underprivileged children. You know, I grew up in the Boys and Girls Club system and I needed mentors. I needed, you know, my coaches back when I was growing up were such big influences on my life, my basketball coaches. And so when I moved down to Miami, I called the boys and girls club up and said, hey, you know, what's your biggest need? You know, how can I be helpful? And they said, you know, a lot of these kids don't have enough money to buy new shoes to play sports. So I ended up coming up with a shoe, you know, giveaway where we gave away $100,000 worth of shoes in Miami. And it was really so successful. I mean,”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it's funny you say that. I mean, I'm such a fan of Barren Buffett's and very much that is the strategy. I mean, by going on social media, by going on the TV, I want people that don't know about me or my company. I want to be on their radar. So when good opportunities do come along, I want to hear about all the good opportunities out there. I also think there's a big opportunity to build our brand internationally, not necessarily buying properties internationally, but fundraising internationally. I haven't really done much international travel in the past. And I think, you know, over the next 10 years, I'll do a lot more of that. It's also a strategy to recruit employees as you become better known as more people know you, you know, it's people want to work for people that are well known, well respected in the industry, the companies that are well known, people want to work for brands. And so I think by building a brand presence, it's a great way to grow your business across the board.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Just plays a big part of this. So, you know, it's really hard to say no, especially if you work around their schedule. Hey, can I buy you a drink? Hey, can I buy you a cup of coffee or take you to lunch? If you make it easy on them and you're humble. And by the way, they're bringing good opportunities and things like that. It's a good way to get mentors. That's what I've typically focused on is bringing value to the table. And like you said, make it a win-win. And then once I had those mentors, I made it a point to keep, you know, keep the relationship going. I'd call them every couple months or so and just check in on them. I'd send them, you know, Christmas gifts. I'd do whatever just to let them know I valued that relationship.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, for sure. I agree with that. I mean, I get messages all day long, and I wish I could help everybody, but hey, can I, you know, can we meet for coffee once a week? Can we do this? If you're really busy, you don't have the time to do that. So I typically found mentors by, you know, looking for one of the most successful guys in the area and bringing them a deal or talking to them about investing or doing something to add value. And a lot of times it resulted in a friendship. And I was humble, was very open about, you know, the fact that I was green and I didn't really know anything at all and that I was very much impressed by them. And I would ask questions, but I was also conscious about not taking up time. I mean, every mentor I remember was pretty harsh. I mean, they would say, listen, don't waste my time with these stupid questions. Come back when you've got good questions, this and that. And so I think you have to have thick skin. And I think humility.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“That's what I'm trying to put out there. As some for financial gain, it's really for just kind of giving back and helping people learn. I had great mentors along the way. And they showed me a lot of things. And so it's kind of like free mentorship just to put out there for the next generation.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Thank you. Yeah. I mean, I always want to be stay on the top of everybody's mind. We know I used to say when they don't hear about you, they think you're dead. And so, you know, we would always come up with a way, a creative way to continue to be out there in the media or making announcements. You know, I make a joke about it now, but I say I used to, you know, if I made it to work on time, do a press release, you know? And so it was just really important. If we hired a key person, we would put something out. Now we put out white papers. I think which is another good strategy. It's just keeping top of mind and putting out information there. I mean, we have access to so much information, so much valuable information that it's really important, I think, for people to have access to, even the things I do on Instagram, it's kind of my way of giving back a little and just saying, hey, this is what I did. It was non-traditional approach, but just like the question you just asked me, what did I do that was different that got me ahead?”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“A concentrated effort at becoming a well known name in the industry. I think as far as hiring, what my strategy was to go to these large established companies and hire maybe the number two or number three person in a certain position and say, hey, look, you can come to my company and be the number one person. And I'm a young guy and I'm going to be doing this a long time and you can make a lot of money. And so as we were going, as we were growing, I was bringing in these really talented people. And so it really, it was about building out a team. It was about marketing ourselves well and paying attention to detail. And then also I spent tons of”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“I mean, I'll tell you, based on funny, but I always, you know, for 20 years, I always wore a suit and tie. And so I was, you know, the youngest guy in the room, but I wanted to look like, you know, I was taking this seriously. And then as I started getting a little more successful, I would always have a nice watch. I wanted the people in the room that really knew to notice and notice the little details. I think marketing is huge. And I've always put a lot of focus on marketing when we prepare our materials, you know, I wanted to look like the biggest out there, even though we weren't. But I wanted it to look like we were, I used to say General Electric, but I wanted to look like we were established. I wanted our wording to sound similar to how all the bigger groups were doing it. And I think, you know, and also we used the media. I mean, I was all over people and reporters to, you know, publish things about us when we would buy properties or sell properties.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Not heard as many of those opportunities. I mean, for a while there, everybody was falling over themselves to do those. I just haven't heard as much of them happening or even seen many of them lately.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Know, I haven't heard as much about them lately, and we never really as a company participated in them. I invested in several opportunity zones personally. I think it's a great opportunity, not to, you know, no pun intended, but a lot of them need to, you know, as far as location location, location, you really need to study the location. So a lot of these opportunity zones are an emerging location or tougher locations that even if you're saving on taxes, it's not something I'd be terribly comfortable investing in. So I think you've got to really get in. Sometimes people make, you know, foolish decisions based on tax savings. You know, I've seen so many people 1031 into properties that are ridiculous and ridiculous price just to save on taxes. And I've always been of the opinion it's better to pay the tax ban and take your time with making investments and not just rely on tax savings. But yeah, I.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Price per square foot. We also want to look for something that's broken. So if the property's leading the market in rents, it's probably not a property for us. We want to look at a property that is similar in quality to other properties. You know, we call them comps, but it's somehow not getting the rent or somewhere the occupancy's off. And we will come in there and make a determination. Can we improve it? If we upgrade the units, can we get, can we push rents? Or if we apply better management, better advertising, can we improve the occupancy of the property? So we typically look for something we feel is undervalued or underperforming and really, really good defensible locations.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Good question. I mean, we focus on, I would say, some markets within some markets. So we want to be typically, if we're looking at suburban properties, we want to be in the markets with the best school districts. So maybe that's a high price home area and people want to send their kids to the exemplary school, but they can't afford to buy the homes. It's a great option to be able to rent apartment in that school district and sing your kids to the great school. So we typically look for markets like that that have great schools, great employment. So maybe it's a great office market as well. People want to be close to work, close to the schools. We also look to buy below replacement costs. We feel like that's a good buffer. If you're in, if you're investment is less than what a new competitor could come build for, you're somewhat insulated. So yeah, we look at cap rate. We look at replacement costs.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Come way down. You can see some of these big investment firms lose a lot of that money. So it's an interesting concept to think about. And, you know, really what markets are they going to want to live in? It's another thing to pay attention to. I don't see people inheriting a ton of money and moving to Kansas. So, you know, these 24-hour cities may come back in vogue. It's going to be interesting to watch play out.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“It's kind of tough to tell. I mean, I see it every day, especially down here. People that have inherited a tremendous amount of money, a lot of times they're not terribly ambitious. They're not going out and starting businesses. They're more interested in living the life of luxury and spending the money than they are and earning it. So it's kind of hard to tell. I mean, I think you could see a boom in high-end homes. You could see a boom in other things like that. And you could probably on the other side, they're not going to want to live in their parents' home. So you could see a flood of homes and other properties come to the market as, you know, as these things are inherited, they want to go move to the new house. They don't want to stay in mom and dad's home. So you could see a lot. You could see a flood of properties hit the market like that that transfer the wealth effect as well. People, you know, baby boomers think a lot differently about wealth and about savings than the millennials. So you can see the savings rate.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“So I think where we are is relatively insulated. I think any job expansion or any coming out of this economy, that's when new house formation starts. And that could be a boom for the multifamily market as well.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I have not heard that stab, but it's pretty crazy. You know, I think, you know, I think you're being offset by if people are staying with their parents, not only are they not renting apartments, they're not buying home. So, you know, I think with the rise in interest rates, it just becomes less affordable for a lot of people. And so you see people staying in apartments longer. I think the market gets most hit by that is probably a single family. I mean, you know, I started out buying a condo myself. I never rented an apartment. I was lucky enough to get a hundred percent mortgage, but I think you see that with a lot of young people. If they get a great job at typhology or finance, they might be inclined to buy a condo. I mean, that's why typically we focus on the middle market because unfortunately a lot of those people are not going to be in a position to buy the high end of the market that, you know, ultra luxury rental apartments, if they can pay those rents, they can typically go out and buy a condo or buy a single family.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Companies will eventually relocate to those areas, which will bring talented workforces like Tampa has seen a lot of inflow of new people with high paying jobs. Miami's seeing that. And I think it's directly tied to how friendly the markets are to do business in.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“I've seen people, I go to the gym every morning, I work out with guys that started businesses and sold them and are looking, you know, to get into new opportunities or, you know, major law firms have moved down here, Citadel, the major finance company is moving down here. Blackstone, Starwit, everyone has a presence down here. So Miami went from a condo market or a market that was depending on tourism to now it's, they call it Wall Street to the south. And so Miami, I'm very bullish. And I think, you know, it started to attract different types of people. And it's truly become an international city. New York, I've been skeptical on for since COVID. But it's interesting when I go back up there, that's booming again. I think, you know, New York's biggest problem, though, is the regulations. So my business plan is focused on business-friendly markets. Markets where people are embraced, you know, companies are embraced. The taxes are low and regulations low. And I believe that.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“I grew up in Tampa, Florida, and I still spent a lot of time there. That market really impresses me. It's completely changed. It was a sleepy, you know, I don't want to say Beach Town, but it was a sleepy floridian town. Now I go there and every restaurant's packed, all the brands that you see in Atlanta and Miami and New York are starting to come to Tampa. And a lot of more professionals are moving down there. I mean, Tampa was a back office community forever. You know, you didn't really see a lot of the entrepreneurial people moving there, a lot of the high-level finance people. And now you do. And so I think Tampa has a lot of growth. I think it's still somewhat under the radar. So that market excites me. You know, I moved down to Miami in April and I am very impressed with Miami. I mean, I think Miami's typically a boom bust market, but I think, you know, this time it could be different, which is usually the worst thing to say.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Humbling. You know, I basically bought the three property management companies. And you think when you buy these companies, they're going to have a brace, okay?”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“To grow a business, to buy properties, you have to have access to capital. And so that goes back to the credibility thing. You're constantly trying to prove yourself and reinvent yourself and stay at the front of the pack. So I think those are some of the biggest challenges.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“I mean, you know, you can't get so comfortable and so confident that you don't notice when the market shifts. You know, if you were a brick and mortar retail and you didn't adopt the internet strategy or the online strategy, you went out of business. You know, I think if you look at this environment now, if you don't adapt your strategy, you're not only foolish, but you'll probably go out of business. So I think you have to be humble enough to accept when your model no longer works. Other challenges were just, look, there was everybody was bigger than me at that point. So, you know, I vividly remember getting bullied and being threatened with lawsuits, things like that, you know, and then cash flow, capital, you know. We were doing deals so fast. You know, I was investing a lot of money in properties, but also wanting to grow the business. And so that was challenging, you know, always finding capital, always that's my primary occupation is finding capital. And so I think.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I mean, the lack of credibility, I didn't go to college, I didn't have, you know, a long track record. I remember, you know, before I bought the property management companies, I was going to New York and saying, hey, look, single family market is going to get crushed and people are going to buy or have to rent multifamily properties. And we should go out and buy those properties. You know, who's with me? And basically, I was told, get the heck out of here. You know, you're 27 years old. You don't have a company. And we partner with fully integrated companies. Then I went out and I bought three property managering companies. So I think the thing you have to get over is the lack of credibility. You can be the smartest person in the world. If you don't have a track record, you're going to be looked at differently. You have to have the ability to take no, but you can't take it, you know, you can't rest on that. I used to always say if somebody said no to me, I would say, well, what would it take to get a yes? And I think you have to be willing to constantly reinvent yourself.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“That they're in this industry and they've been in this industry a long time. Bush Starwood and Blackstone, you know, those are the groups that help me get going and they have extremely smart people. And I'm sure they'll figure out whatever issues they come across. And so you've got to remain humble. You know, they're the biggest and best and they have a little bit of mud on their face. There's never a smartest guy in the room. Once you get to a certain level, everybody's smart, everybody's hungry, everybody's aggressive. So I think, you know, I felt confident enough to be in the room. I just was humbled by the lack of experience and, you know, the knowledge that they had.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I don't think I necessarily felt like an imposter. I felt kind of like high school basketball player playing against LeBron James. I mean, I knew I was, you know, from an experience standpoint and from a just education standpoint, I was outmatched, but it also made me really humble. And so I would tell potential investors, look, I won't eat, sleep, or anything until I make money back and earn, you know, my position in this business. And that's what I did. I went out and I would work, I think 18 hours a day when I was getting started. I would look for properties that not others could find. I was just trying to do anything to substantiate my existence in the industry. And thankfully, I delivered on that. But I think, you know, instead of, I was always confident. I always felt I could figure it out. But yeah, it's definitely made me humble. Still makes me humble. I mean, there's a lot of people that are very, very smart people.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Can buy with exceptionally high cash flow and things like that mitigate risk and a downturn. The idea of building something that has no cash flow and just hoping that it works out in two years or however long it takes you to build is a scary proposition going into an environment like we are.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, absolutely. I mean, we look at development deals just about every day. Where we're focused now is basically, you know, I think developers that may be in trouble, we can come in there and provide capital. So basically using our balance sheet to come in there and help out potentially struggling developers. Development makes a lot of sense when you, when it's more expensive to buy than it is build. And I think we're not in that area anymore. I think it's going to be a lot cheaper to buy than build. You still have supply chain issues, even though they've eased up. And I think it's going to be harder to get financing for development. So I think as we've done, I think we'll continue to be on the buy side. Some areas that we've looked at are build to rent, which is single family build-to-rent, which I think is attractive. But it's not really a great time to speculate. I like in downturns. I like to come in and find value. Things that, you know, we can buy below replacement costs, things that we.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Sitting here in Miami today. And, you know, the prices that were paid a year ago aren't available now. And I think there's a bunch of reasons for that. I mean, Miami had a lot of technology employees move down. That sector has been crushed, especially crypto. So you don't have that buyer pool, the foreign buyer. I mean, they used to be a lot of Russian buyers, a lot of Chinese buyers. They're out of the market. So I think you've got to expect on the higher end prices to come down and also the middle market. You know, there's just people that could finance a home at a low interest rate a year ago could buy double the price of the home today. So if they qualified for a $600,000 loan a year ago, they would qualify for a $300,000 loan today. That's got to have an effect on prices.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“I don't know if anything is really undervalued right now, but my belief is a sunbelt. Before COVID, nobody really paid attention to it, at least not nearly the international focus that happened after COVID. Post COVID, I get calls weekly from international investors that want to be in the sunbelt. They believe in the long term viability. They believe that it's job friendly, it's going to continue.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“That we focus on that we would otherwise be buyers of. So we're going to underwrite those properties as if we were to buy them. And we're going to lend on them. And that's what we're really looking for. So we're looking at it from a buyer standpoint and also from a lender standpoint.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, multi family's asset class that I'm most comfortable with and believe, you know, the strong most strongly in. When I did sell my portfolio in 08, I had done just about every asset class I dental office, retail, single family. And I really made a concentrated effort to go into multifamily. I mean, you could look back 20 years and occupancies were at like 90%. I still feel bullish about that. The need for affordable housing or workforce housing is something that is not going to be ever met. You know, you can't really afford to go in as a developer and build that type of product and rent at that type of price point. It's typically older properties in good locations that you come in and renovate, but you can offer them at a much lower rent than you could if you built new and your cost was double that to build. So we're looking for properties that are great properties and the bar.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“A little bit of good timing, and you know, I think I can sense that the market was overheated. You know, I didn't know when it was going to end, but I just knew it was, you know, a little too good to be true. So yeah, even at the beginning, you know, the first part of this year, we exited 2 billion worth of property. I think, like you said, over the last three or four years, we've sold off 30,000 units. And so we're in a great position. We're in a highly liquid position. We have great investor backing. And so, yeah, it's a little bit of good luck and it's a little bit of intuition. Similar thing happened to me in 08. I sold my portfolio off in March of 2008 and September of 2008, the market crashed. So I'm either very lucky or very, I'll go with very lucky. But yeah, we're in a great position, you know, thrilled to have sold kind of a peak pricing and feel very fortunate.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Panic and freeze up. I think, you know, if you keep your head and you remain calm, you can spot out opportunities while others remain on the sidelines.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, you know, don't freeze up. I mean, I think a lot of people in downturns, they get scared when a shock happens and they freeze up. They do nothing. What we're doing is looking for creative ways to stay active. So, you know, I just launched Carol Capital. Carol Capital's business plan is to come in there and lend capital on good properties where the borrowers have just gotten in trouble. So, you know, their interest rate caps have expired or their loan to value is too high and they need to pay down that loan to value. So we'll come in in a preferred position and provide that what I'm calling rescue capital. Another thing we're looking at is buying companies, you know, buying property management companies, buying other real estate companies. If you look at the public capital market or the public equity markets right now, those values are down 25 to 30 percent. So, you know, those are interesting plates. So I think the worst thing you can do in a downturn is.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“A little of both. I mean, we are active. We are underwriting a lot of things. We're working on a large transaction right now. I think the challenge is, and we're still able to get.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Housing. I think the demand's going to continue because, as we've discussed, it's nearly impossible for a lot of people to buy a home right now with where interest rates are. You know, we had record low interest rates for 10 plus years. So I think what you're going to see is people that are having financial trouble, one, aren't going to be able to buy homes. But if they get in real trouble, they're not going to be able to pay their rent. It's a scary situation, I think, for all asset classes.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it's kind of a little bit of everything. We are still able to do rent increases. So, you know, the fundamentals are still strong. You know, one thing we've noticed lately, probably over the last 30 to 60 days is delinquencies have started ticking up. Now, nothing to a point where it's terribly concerning, nothing like 0809. But we are starting to see delinquencies happen where, you know, that typically is because due to job loss or some other financial strain. So, you know, a lot of times these things are delayed. Not everybody realizes that their credit card bill is now higher because of their interest rate. And so eventually, and their food bill is now higher and gasoline's a lot higher until eventually they're out of money. And so it's unfortunate, but that's what's happening. But again, the market that we primarily at play in is still strong. I mean, there's still a demand for red.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Criteria and you can't really do that much volume that some of these groups were doing without dropping your underwriting a little bit. There's no secret sauce to lending. And when you see some of these groups, you know, some of these debt funds, some of these non-traded REITs come out and do such volume, you have to realize that they're probably dropping the underwriting. They're probably being a little too aggressive. I mean, I know Blackstone and Starwood, they're B-Reet and S-Reet. I mean, they're getting tons of headlines right now. But they were the most active borrows over the last two years. They were paying prices that nobody was paying. They were way overpaying. And it's just because they had too much capital. So when you look at somebody that's doing that much volume with a relatively small shop, you have to realize that, again, there'd be a little too aggressive. And Warren Buffett says, nobody knows who's swimming naked till the tide goes out. You know, a lot of these groups that get aggressive in good times and look really good.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I mean, the debt funds I just referred to are all but out of business, and it's ugly. I mean, they're getting capital calls. A lot of the loans they've made are underwater. So, and it's leverage upon leverage, meaning if they have $100 million, they lend that out and then they borrow $50 million against that. So they're lending me now to $150 million. So when that $100 million that they lent first drops in value, they get a capital call from Bank of America, JP Morgan, whatever. And eventually, you know, it comes to a point where they can't make those capital calls. So I think you have a period right now where everybody's kind of frozen up these debt funds may not be getting paid their interest, but the banks don't want to start foreclosing yet. So I do think, you know, the shadow baking is, you know, it's happening in the single family market too. All these kind of mortgage companies that you never really heard of were lending money probably at week.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Something like that. The banks have been restricted for. I'll tell you right now, they're not in the market. They're not giving quotes. They're not financing anything. So whenever something like that happens, it makes me believe they're not as healthy as they may allude to.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“I mean, you know, banks were so complicated to begin with. They are, you never really know what a bank's doing until you peel back the covers. I mean, they have loans for big, big lending fund. I mean, debt funds. Basically, you know, 80% of the properties in my business in my industry were financed last year, I believe it was last year, on debts, debt funds. So very, very aggressive lending, very short-term lending too, almost bridge loans that are all in trouble right now. They're all underwater. Well, they operate off of warehouse loans given to them by banks. So if these guys are in trouble, the bank becomes in trouble. So there's a lot of things out there that, you know, a lot of everyday people don't really understand about banks. I mean, that's what caused the last downturn was CLOs. I mean, the housing market was a big problem, but, you know, it was leverage upon leverage that really brought the house down. So I do think you could see.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Shape now, you could definitely see something very resemblant of 2008. And that's been my view. I mean, everything's fine until it's not. And so, yeah, the banks may be good right now, but if 25% of the people with home loans stop paying, it's a really different story.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I mean, that definitely could happen when people start speculating. I mean, you see it happening in China right now. When people speculate on homes and they don't have enough revenue coming in, so Airbnb, if people stop traveling as much, stop using those, you know, those people are going to have to feed those properties. I mean, I remember back in 2008, a lot of people had rental properties, 0809. And, you know, even friends of mine had five houses and they were renting them out. And as soon as a resident would move out, they couldn't afford their mortgage and they ended up walking away. You know, it's a lot easier to walk away from an investment property than it is your primary resident. So yeah, I definitely think that could be scary. What causes mainly every downturn that I've been part of is a shock to the capital markets, the debts. So yeah, if you have a mass wave of people handing back the keys and these banks that are supposedly in good shape becoming, you know, and not so good.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Distress because property owners that are looking to refinance all the developers that have construction loans on right now that are short-term loans, when they go to finance the properties, their properties are going to be underwater. And they're not going to be able to finance them. So that can cause a downturn for sure. All the corporate debt that adds floating rate, you know, everything that basically causes interest or that uses interest and leverage is going to be affected by this. Even the national government, you know, they're paying so much more in interest carry that that's going to have an effect. So there's a lot of things. I mean, everything is basically tied to interest rates. I mean, I remember Warren Buffett said, you know, interest rates are like gravity. They keep every, you know, as they go up, things like that. So it's really tied to everything. But yeah, there's definitely was not one big failure unless you consider what the federal government's doing. There was no big failure that caused this. It was just interest rates.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it's totally different as far as I've been in the business. I've been in the business since 2004. What's causing the freeze this time? As you mentioned, there was no big failure of a big bank or anything like that. It's purely capital markets. And I think everybody expected interest rates to go up. Nobody expected them to go up as rapidly, as fast as they did. So what you're having now as lenders don't really know how to price their debt. They want to price to get a, you know, a return. They don't want to put money out today and have interest rates keep rising and their loans are underwater. So it's purely a capital markets thing. I think, you know, you could point to the office sector. I do think you'll see some defaults there just because the weakness of that sector. But I don't think you'll see massive defaults or a bank failure that's going to cause the market to freeze even more. I think the market freezing may cause massive.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, definitely. I mean, I think that's what you're looking at now. Like you said, people that were lucky enough to lock in low interest rate mortgages are going to be, you are going to stay put. I think the only thing that causes somebody, you know, that has a good loan on the property to sell is if there's a panic where you read in the paper, home prices have gone down 25% and you start seeing your neighbors dump properties, things like that, that could be a catalyst. But right now it's literally double the cost to buy a new house with where interest rates are. So that will keep people renting longer. It's definitely a sticker shock. I think people, you know, maybe they've been looking to buy for a couple years are now seeing they can afford, you know, half the home. So I do think it's going to keep people put, whether it's renting or if they have good mortgages in place for the time being.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“Nobody really knows how to price properties. Cap rates are tied to interest rates, and nobody really has conviction on where interest rates are going. So there's a disconnect on what people are willing to pay for properties, what sellers are willing to sell for. So the market's basically frozen. A lot of times when that happens too, you know, the last time that happened was 2008, 2009. So there's definitely similarities there. I don't think we're quite there yet, but a slip up in the single family home market could certainly put us back in that type of condition.”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT
“In the last large downturn in 08, 09, it was really caused by the single family home market and mortgages there. And I see that possibly happening here. I mean, as property values decline and people become underwater on their mortgages, they're more inclined to walk away. Same with new loans or adjustable rate loans as those interest payments go up and cost of basically everything's gone up. Gasoline, food, everything. Again, some people, if there's layoffs, will be forced to give back the keys. I'll tell you what's different this time is the fundamentals are still strong. As you said, job growth is still happening. You haven't seen a major contraction in the economy. And my primary business, multifamily housing, we're still seeing rent growth, occupancy. But you're seeing a huge increase in interest expense and debt. So you have these properties that are performing well. But with the increase in interest rates,”
2023-01-20 · We Study Billionaires · TIP516: Navigating A Real Estate Market On The Brink w/ Patrick Carroll · IDENTIFIED FROM THE TRANSCRIPT