Navigating the Real Estate Market: Insights from Brian Burke

In a recent episode of Passive Investing from Left Field, host Jim Pfeifer sits down with Brian Burke, president and CEO of Praxis Capital, to discuss the current state of the real estate market. With over $800 million in real estate acquisitions, Brian shares his experience and offers valuable advice for passive investors looking to weather these challenging times and emerge stronger.

Capital Preservation and Patience

Brian emphasizes the importance of capital preservation and a disciplined approach to investing. Despite the challenges faced by many investors, he has maintained his impressive track record of not losing investor money. This success can be attributed to his unwavering commitment to safeguarding his investors’ capital and making prudent investment decisions.

When considering future acquisitions, Brian advises patience and caution. In a turbulent market, it can be tempting to jump at seemingly attractive opportunities, but Brian stresses the importance of waiting for clear signs of market recovery before making significant moves. This approach ensures that investors are not caught off guard by sudden market shifts and can make informed decisions based on solid fundamentals.

Rate Caps and Debt Structures

Diving into the intricacies of rate caps and debt structures, Brian explains how these financial tools can help mitigate risks and protect investor capital in a fluctuating market. Rate caps, which limit the maximum interest rate paid on a loan, can provide a degree of stability and predictability in an environment where interest rates are subject to change.

Brian also highlights the distinction between bridge debt and agency adjustable debt, stressing the risks associated with short-term maturities and the importance of having the flexibility to ride out market downturns. Bridge debt, which typically has a shorter term and is used to fund the acquisition and rehabilitation of a property, can be particularly risky in a volatile market. If the property fails to stabilize or sell within the expected timeframe, investors may find themselves in a precarious position.

On the other hand, agency adjustable debt, such as Fannie Mae or Freddie Mac loans, often provides more flexibility and longer terms. While these loans may have adjustable interest rates, they also offer the benefit of extended maturity dates, allowing investors more time to weather market fluctuations and implement their business plans.

Realistic Expectations for Distributions

Brian emphasizes the need for investors to align their expectations with market realities. Distributions should reflect a property’s actual cash flow rather than a fixed, predetermined amount. This means that investors should be prepared for fluctuations in their income streams, especially during challenging market conditions.

He cautions against sponsors distributing money from sources other than operations, such as capital reserves or refinancing proceeds, as it can mask an asset’s true performance. While this practice may provide short-term relief to investors, it can ultimately lead to long-term instability and diminished returns.

Capital calls, once a red flag, have become more common in the current market. These occur when a sponsor requires additional funds from investors to cover unexpected expenses or to take advantage of new opportunities. Brian advises understanding the circumstances surrounding these calls and evaluating a sponsor’s ability to navigate challenges. Investors should carefully consider the track record and experience of their sponsors before committing additional capital.

Debt Funds and Alternative Strategies

Debt funds can provide attractive returns while mitigating risks, offering a degree of safety that may be lacking in traditional equity investments. These funds typically invest in a diversified portfolio of real estate loans, providing exposure to the real estate market without the direct ownership of properties.

Brian shares insights on Praxis Capital’s bridge mortgage fund, which has generated consistent returns for investors while maintaining a conservative approach to risk management. By focusing on short-term, first-position loans to experienced real estate investors, the fund has been able to provide stable income to its investors while minimizing the risk of default.

Looking Ahead

Diversification, both in asset classes and sponsors, is crucial for investors looking to navigate the uncertain real estate market. Brian advises focusing on quality over quantity when selecting investment partners, seeking out sponsors with a proven track record of success and a deep understanding of their target markets.

He also warns against chasing high internal rates of return (IRRs) and encourages investors to view these opportunities as speculation rather than core investments. In a market where cap rates are compressed and competition for deals is fierce, sponsors may be tempted to underwrite aggressive assumptions to justify higher returns. However, this approach can lead to disappointment down the line if the projected growth fails to materialize.

Instead, Brian recommends that investors focus on the fundamentals of each investment opportunity, such as the quality of the asset, the strength of the sponsor, and the overall market dynamics. By taking a long-term view and prioritizing cash flow over speculative appreciation, investors can build a more resilient portfolio that can withstand market volatility.

Patience, discipline, and a focus on fundamentals will position investors to weather the storm and emerge stronger. This may mean passing on deals that don’t meet strict underwriting criteria or waiting on the sidelines until more favorable conditions arise. While it can be challenging to resist the fear of missing out, a disciplined approach will ultimately lead to better outcomes in the long run.

Lessons Learned

Throughout the episode, Brian’s insights serve as a valuable road map for passive investors navigating the challenges and opportunities of the real estate market. His emphasis on capital preservation, realistic expectations, and the importance of quality sponsors resonates with listeners seeking to build long-term wealth through real estate investing.

One of the key takeaways from the conversation is the importance of aligning one’s investment strategy with personal goals and risk tolerance. While it can be tempting to chase high returns or follow the crowd, successful investors understand the value of staying true to their own objectives and making decisions based on sound analysis and due diligence.

Another important lesson is the need for adaptability in the face of changing market conditions. As Brian points out, the real estate market is constantly evolving, and what worked in the past may not work in the future. By staying informed, maintaining a flexible mindset, and being willing to pivot when necessary, investors can position themselves to capitalize on new opportunities as they arise.

Ultimately, building a successful real estate investment portfolio requires a combination of knowledge, skill, and perseverance. By learning from the experiences of seasoned professionals like Brian Burke, passive investors can gain the tools and insights needed to make informed decisions and achieve their long-term financial goals.

To gain more valuable insights from Brian Burke and other industry experts, tune in to Passive Investing from Left Field. This episode offers a wealth of knowledge for passive investors looking to deepen their understanding of the market and make informed decisions in uncertain times.

Take Your Investing to the Next Level

If you enjoyed Brian’s wisdom and stories, the Left Field Investors (LFI) Community offers more great resources to advance your real estate investing education.

Become an LFI “Infielder” to access:

  • Exclusive educational content and investor training programs
  • Off-market investment opportunities from vetted sponsors
  • A network of thousands of like-minded passive investors
  • Virtual and in-person events to engage with experts
  • The support to confidently build your investment portfolio

Whether you are new to passive real estate investing or a seasoned veteran, LFI provides contacts, knowledge, and opportunities.

Join now to take your investing to the next level!

Chris Franckhauser

Vice President of Strategy & Growth, Advisory Partner

Chris Franckhauser, Vice President of Strategy & Growth, Advisory Partner for Left Field Investors, has been involved in real estate since 2008. He started with one single-family fix and flip, and he was hooked. He then scaled, completing five more over a brief period. While he enjoyed the journey and the financial tailwinds that came with each completed project, being an active investor with a W2 at the time, became too much to manage with a young and growing family. Seeing this was not easily scalable or sustainable long term, he searched for alternative ideas on where to invest. He explored other passive income streams but kept coming back to his two passions; real estate and time with his family. He discovered syndications after reconnecting with a former colleague and LFI Founder. He joined Left Field Investors in 2023 and has quickly immersed himself into the community and as a key member of our team.  

Chris earned a B.S. from The Ohio State University. After years in healthcare technology and medical devices, from startups to Fortune 15 companies, Chris shifted his efforts to consulting and owning a small apparel business when he is not working with LFI (Left Field Investors) or on his personal passive investments. A few years ago, Chris and his family left the cold life in Ohio for lake life in the Carolinas. Chris lives in Tega Cay, South Carolina with his wife and two kids. In his free time, he enjoys exploring all the things the Carolinas offer, from the beaches to the mountains and everywhere in between, volunteering at the school, coaching his kids’ sports teams and cheering on the Buckeyes from afar.  

Chris knows investing is a team sport. Being a strategic thinker and analytical by nature, the ability to collaborate with like-minded individuals in the Left Field Community and other communities is invaluable.  

Jim Pfeifer

President, Chief Executive Officer, Founder

Jim Pfeifer is one of the founders of Left Field Investors and the host of the Passive Investing from Left Field podcast. Left Field Investors is a group dedicated to educating and assisting like-minded investors negotiate the nuances of the passive investing landscape and world of syndications. Jim is a former financial advisor who became frustrated with the one-path-fits-all approach of the standard financial services industry. Jim now concentrates on investing in real assets that produce cash flow and is committed to sharing his knowledge with others who are interested in learning a different way to grow wealth.

Jim not only advises and helps people get started in passive real estate syndications, he also invests alongside them in small groups to allow for diversification among multiple investments and syndication sponsors. Jim believes the most important factor in a successful syndication is finding a sponsor that he knows, likes and trusts.

He has invested in over 100 passive syndications including apartments, mobile homes, self-storage, private lending and notes, ATM’s, commercial and industrial triple net leases, assisted living facilities and international coffee farms and cacao producers. Jim is constantly looking for new investment ideas that match his philosophy of real assets producing cash flow as well as looking for new sponsors with whom he can build quality, long-term relationships. Jim earned a degree in Finance & Marketing from the University of Oregon and a Master’s in Business Education from The Ohio State University. He has worked as a reinsurance underwriter, high school finance teacher, financial advisor and now works exclusively as a full-time passive investor. Jim lives in Dublin, Ohio with his wife, three kids and two dogs. In his free time, he loves to ski, play Ultimate frisbee and cheer on the Buckeyes.

Jim earned a degree in Finance & Marketing from the University of Oregon and a Master’s in Business Education from The Ohio State University. He has worked as a reinsurance underwriter, high school finance teacher, financial advisor and now works exclusively as a full-time passive investor. Jim lives in Dublin, Ohio with his wife, three kids and two dogs. In his free time, he loves to ski, play Ultimate frisbee and cheer on the Buckeyes.

Chad Ackerman

Chief Operating Officer, Founder

Chad is the Founder & Chief Operating Officer of Left Field Investors and the host of the LFI Spotlight podcast. Chad was in banking most of his career with a focus on data analytics, but in March of 2023 he left his W2 to become LFI’s second full time employee.

Chad always had a passion for real estate, so his analytics skills translated well into the deal analyzer side of the business. Through his training, education and networking Chad was able to align his passive investing to compliment his involvement with LFI while allowing him to grow his wealth and take steps towards financial freedom. He has appreciated the help he’s received from others along his journey which is why he is excited to host the LFI Spotlight podcast and share the experience of other investors and industry experts to assist those that are looking for education for their own journey.

Chad has a Bachelor’s Degree in Business with a Minor in Real Estate from the University of Cincinnati. He is working to educate his two teenagers in the passive investing world. In his spare time he likes to golf, kayak, and check out the local brewery scene.

Ryan Steig

Chief Financial Officer, Founder

Ryan Stieg started down the path of passive investing like many of us did, after he picked up a little purple book called Rich Dad, Poor Dad. The problem was that he did that in college and didn’t take action to start investing passively until many years later when that itch to invest passively crept back up.

Ryan became an accidental landlord after moving from Phoenix back to Montana in 2007, a rental he kept until 2016 when he started investing more intentionally. Since 2016, Ryan has focused (or should we say lack thereof) on all different kinds of investing, always returning to real estate and business as his mainstay. Ryan has a small portfolio of one-to-three-unit rentals across four different markets in the US. He has also invested in over fifty real estate syndication investments individually or with an investment group or tribe. Working to diversify in multiple asset classes, Ryan invests in multi-family, note funds, NNN industrial, retail, office, self-storage, online businesses, start-ups, and several other asset classes that further cement his self-diagnosis of “shiny object syndrome”.

However, with all of those reaches over the years, Ryan still believes in the long-term success and tenets of passive, cash-flow-focused investing with proven syndicators and shared knowledge in investing.

When he’s not working with LFI or on his personal passive investments, he recently opened a new Club Pilates franchise studio after an insurance career. Outside of that, he can be found with his wife watching whatever sport one of their two boys is involved in during that particular season.

Steve Suh

Chief Content Officer, Founder

Steve Suh, one of the founders of Left Field Investors and its Chief Content Officer, has been involved with real estate and alternative assets since 2005. Like many, he saw his net worth plummet during the two major stock market crashes in the early 2000s. Since then, he vowed to find other ways to invest his money. Reading Rich Dad, Poor Dad gave Steve the impetus to learn about real estate investing. He first became a landlord after purchasing his office condo. He then invested passively as a limited partner in oil and gas drilling syndications but quickly learned the importance of scrutinizing sponsors when he stopped getting returns after only a few months. Steve came back to real estate by buying a few small residential rentals. Seeing that this was not easily scalable, he searched for alternative ideas. After listening to hundreds of podcasts and attending numerous real estate investing meetings, he determined that passively investing in real estate syndications was the best avenue to get great, risk-adjusted returns. He has invested in dozens of syndications involving apartment buildings, self-storage facilities, resort properties, ATMs, Bitcoin mining funds, car washes, a coffee farm, and even a Broadway show.

When Steve is not vetting commercial real estate syndications in the evenings, he is stomping out eye diseases and improving vision during the day as an ophthalmologist. He enjoys playing in his tennis and pickleball leagues and rooting for his Buckeyes and Steelers football teams. In the past several years, he took up running and has completed three full marathons, including the New York City Marathon. He is always on a quest to find great pizza, BBQ brisket, and bourbon. He enjoys traveling with his wife and their three adult kids. They usually go on a medical mission trip once a year to southern Mexico to provide eye surgeries and glasses to the residents. Steve has enjoyed being a part of Left Field Investors to help others learn about the merits of passive, real asset investments.

Sean Donnelly

Chief Culture Officer, Founder

Sean holds a W2 job in the finance sector and began his real estate investing journey shortly after earning his MBA. Unfortunately, it could not have begun at a worse time … anyone remember 2007 … but even the recession provided worthy lessons. Sean stayed in the game continuing to find his place, progressing from flipping to owning single and multi-family rentals to now funding opportunities through syndications. While Sean is still heavily invested in the equities market and holds a small portfolio of rentals, he strongly believes passive investing is the best way to offset the cyclical nature of traditional investment vehicles as well as avoid the headaches of direct property ownership. Through consistent cash flow, long term yield and available tax benefits, the diversification offered with passive investing brings a welcomed balance to an otherwise turbulent investing scheme. What Sean likes most about the syndication space is that the investment opportunities are not “one size fits all” and the community of investors genuinely want to help.

He earned a B.S. in Finance from Iowa State University in 1995 and a MBA from Otterbein University in 2007. Sean has lived in eight states but has called Ohio home for the last 20+.  When not attending his children’s various school/sporting events, Sean can be found running, golfing, shooting or fly-fishing.

Patrick Wills

Chief Information Officer, Advisory Partner

An active real estate investor since 2017, Patrick Wills’ investing journey began like many others – after reading the “purple book” by Robert Kiyosaki. Patrick started with single family rentals, and while they performed well, he quickly realized their inability to scale efficiently while remaining passive. He discovered syndications via podcasts and local meetups and never looked back. He joined Left Field Investors in 2022 as a member and has quickly become an integral part of the team as Vice President of Technology.

An I.T. Systems Engineer by trade, he experienced the limitations of traditional Wall Street investing firsthand in his career and knew there had to be a better way to truly have financial freedom.

Unfortunately, that better way is inaccessible to those who need it most. His mission is to make alternative investments accessible to everyone who seeks to take control of their financial future and to pursue their passions in life.

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