Real Estate Investing in 2025 w/Casey Stratton

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Episode Description

Welcome to the Freedom Point Real Estate podcast! Guest Casey Stratton joins today's episode to share his insight into preparing for coming investing opportunities, leveraging the strengths of others, raising capital, and more.

Casey Stratton is a seasoned professional with over a decade of expertise in real estate investment, specializing in multifamily assets. Through his career, Casey has played an instrumental role in managing a diverse investment portfolio exceeding $165 million in asset value, raising investor capital, and minimizing investment risk. Prior to his venture into real estate, Casey served as a Chief Financial Officer in both the legal and tech sectors, honing his financial acumen and strategic leadership skills. With a keen eye for identifying lucrative opportunities and a proven track record of successful investments, Casey is regarded as a trusted authority in the realm of real estate finance and investment.

CONNECT WITH CASEY STRATTON!

Website: https://tamarackrei.com/

LinkedIn: https://www.linkedin.com/in/casey-stratton/

CONNECT WITH JEREMY DYER!

Website: https://startingpointcapital.com/

Instagram: https://www.instagram.com/startingpointcapital/

LinkedIn: https://www.linkedin.com/in/jeremydyer

Facebook: https://www.facebook.com/startingpointcapital

Book a Call! https://calendly.com/startingpointcapital/discuss-investing-with-jeremy-dyer?month=2023-12

Summary

Tip #1: Why Passive Investors Choose Real Estate

"You can't force appreciation on a stock, but with real estate, we can force appreciation by improving the asset and increasing cash flow."

Many investors are drawn to real estate because of the control it offers over value creation. Unlike stocks, where value is dictated by market forces, real estate investments can be actively improved through renovations, operational efficiencies, and strategic management. Additionally, tax benefits like depreciation provide further incentives, making it a powerful tool for wealth-building.

Tip #2: Understanding Market Cycles and Timing Investments

"2025 is looking to be a killer year for acquisitions because we’ve been underbuilding housing for 15 years, creating systemic shortages."

Market cycles significantly impact investment success, and understanding supply and demand dynamics is crucial. The long-term housing shortage has created persistent upward pressure on rents and values, making well-timed acquisitions particularly lucrative. Investors who recognize these trends can take advantage of opportunities when prices are relatively lower and fundamentals are strong.

Tip #3: The Impact of Interest Rates on Real Estate Deals

"The expectation is that interest rates are not going to drop back to where they were, and sellers who have been waiting will have to face reality."

Higher interest rates have changed the investment landscape, slowing down transactions and forcing price adjustments. Savvy investors recognize that rate fluctuations create buying opportunities, as distressed sellers must offload properties at discounts. Positioning capital strategically during these cycles can yield high long-term returns.

Tip #4: Diversification to Reduce Investment Risk

"You’re going to buy when prices are high, and you’re going to buy when prices are low—that’s why dollar-cost averaging is important."

Real estate investors can mitigate risk by diversifying across markets, operators, and deal structures. Rather than attempting to perfectly time the market, consistent investments over time help balance fluctuations in value. A mix of property types and geographical locations further protects against localized downturns.

Tip #5: Vetting Real Estate Operators Before Investing

"You’ve got to get a good feeling about the operators you invest with. Some are in it for themselves, but the best ones build their reputation on trust."

Choosing the right investment sponsor is as important as selecting the right property. Investors should ask tough questions about past performance, risk management strategies, and alignment of interests. Transparency, experience, and a proven track record are key indicators of a reliable operator.

Tip #6: Evaluating the Pro Forma and Financial Assumptions

"A pro forma is just a collection of assumptions—ask how they justified rent growth, expense projections, and exit cap rates."

Many real estate deals look attractive on paper, but projected returns depend on key financial assumptions. Investors should scrutinize rental growth estimates, expense reduction strategies, and projected exit valuations. Conservative underwriting is a sign of a disciplined operator who prioritizes long-term success over short-term sales.

Tip #7: The Benefits of Vertical Integration in Real Estate

"If you own the property management company and the construction crew, you control the timeline, the costs, and the results."

Vertically integrated operators have a competitive edge because they manage renovations and operations in-house. This reduces inefficiencies, prevents budget overruns, and ensures alignment with investment goals. Investors who prioritize vertically integrated firms can often achieve more predictable and profitable outcomes.

Tip #8: Key Questions to Ask Before Investing in a Deal

"A question I don’t get asked enough: ‘What keeps you up at night about this investment?’ That’s where you find the real risks."

Asking insightful questions can reveal the strengths and weaknesses of an investment opportunity. Inquiring about worst-case scenarios, contingency plans, and debt structuring helps investors understand potential pitfalls. Sponsors who openly discuss risks demonstrate confidence in their ability to navigate challenges.

Tip #9: The Role of Exit Strategies in Investment Success

"We want to make sure our debt structure matches our exit strategy. If we plan a five-year hold, we need a loan with at least a seven-year term."

A well-thought-out exit strategy is critical to a successful real estate investment. Investors should look for deals where financing terms align with the projected hold period to avoid forced sales at inopportune times. Evaluating exit cap rate assumptions also ensures realistic expectations for future resale values.

Tip #10: How to Get Started as a First-Time Passive Investor

"If you’re new to syndications, start by diversifying across operators and asking tough questions about how they structure deals."

New investors should begin with smaller commitments across multiple operators to gain experience and mitigate risk. Learning to analyze deal structures, financial projections, and management styles will build confidence. Engaging with investment communities and asking experienced investors for insights can accelerate the learning process.