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How to Survive a Multifamily Real Estate Crash (And Come Back Stronger)
If you’ve been watching the multifamily real estate market over the past few years, you’ve probably asked yourself the same question I have:
How do some investors go through one of the worst markets in decades and come out stronger?
Because let’s be honest… a lot of people didn’t.
Some lost deals.
Some lost investor money.
Some disappeared completely.
But others? They adapted. They pivoted. They grew.
In this episode of the Money Ripples Podcast, I sat down with August Biniaz, co-founder of CPI Capital, to break down exactly what separates those who survive from those who don’t.
And what we talked about isn’t theory it’s what actually works when markets turn against you.
The Truth About the “Glory Days” of Multifamily
Let’s start here…
From around 2011 to 2019, real estate especially multifamily was on an absolute bull run.
Prices were rising.
Rents were climbing.
Debt was cheap and easy.
Honestly, you didn’t have to be that good to win.
But that’s exactly what created the problem.
Because when things are easy for too long, people get complacent.
And that complacency showed up in a few dangerous ways:
- Overleveraging deals
- Using short-term, high-risk debt
- Assuming rents would always go up
- Ignoring real estate cycles
Then 2022 hit.
Interest rates spiked faster than we’ve seen in decades.
And suddenly… everything broke.
What Actually Killed Most Multifamily Deals
A lot of people think it was just interest rates.
That’s only part of the story.
Here’s what really happened:
1. Bad Debt Structures
Many investors were using floating-rate loans with short-term maturities.
That worked great until rates jumped.
Now payments skyrocketed, and deals couldn’t cash flow.
2. Overpaying for Properties
When money was cheap, people paid premium prices assuming future growth would bail them out.
When growth stopped… those numbers didn’t work anymore.
3. Oversupply in Key Markets
Markets like Austin, Phoenix, and parts of Florida saw massive development.
Too many units = lower rents and higher vacancy.
4. Lack of Discipline
This might be the biggest one.
Too many investors felt pressure to “keep doing deals” instead of stepping back.
The Move Most Investors Were Afraid to Make
Here’s what stood out to me about August and his team: They stopped.
For nearly two years… they didn’t do deals.
That’s not easy.
Especially when:
- Investors are asking for opportunities
- Your team wants to stay active
- The market is telling you to “keep going”
But they understood something most people don’t: Sometimes the best investment decision is to do nothing.
That discipline likely saved them and their investors from major losses.
Why Most Deals Still Don’t Work Today
You might be thinking:
“Okay, but now prices have dropped… so isn’t it a good time to buy?”
Not necessarily.
Here’s why deals still aren’t penciling for many investors:
- Interest rates are still relatively high
- Financing is tighter (lower leverage)
- Rent growth is flat or declining in many markets
- Investors expect higher returns (because safer options exist)
Think about it…
If someone can earn:
- 4–5% in Treasuries
- 8–9% in debt funds
Why would they take real estate risk for less than 15%?
That’s why many deals just don’t make sense right now.
Why I Still Believe in Multifamily Long-Term
Now, don’t get me wrong I’m not bearish on multifamily.
In fact, fundamentally, it’s still one of the strongest asset classes out there.
Here’s why:
- Over 40 million Americans live in rental housing
- The U.S. is becoming more of a renter nation
- Housing affordability continues to decline
- Demand for rentals isn’t going away
But here’s the key: Just because an asset class is strong doesn’t mean every deal is good.
Timing, strategy, and execution matter more than ever.
The Shift to Build-to-Rent (BTR)
One of the biggest pivots we talked about is the rise of build-to-rent communities.
This is something you need to pay attention to.
Why?
Because it serves a different type of renter:
- Renters by choice (not necessity)
- People who want flexibility and mobility
- Millennials who don’t want to be tied down
- Families who want space without ownership
These communities offer:
- Single-family style living
- More privacy (no shared walls, no upstairs neighbors)
- Amenities similar to apartments
And in many markets, demand is growing fast.
The Biggest Lesson From This Market
If there’s one thing I want you to take away from this, it’s this: Cycles are real.
And they don’t care about your plans.
Every investor has a strategy… until the market punches them in the face.
The difference between success and failure isn’t avoiding cycles.
It’s how you respond to them.
What You Should Do Right Now
If you’re a passive investor or looking to become one here’s what I recommend:
1. Focus on the Operator
The deal matters… but the operator matters more.
Have they been through a downturn before?
Did they survive it?
2. Understand the Debt
Don’t ignore financing.
Ask:
- Is it fixed or floating?
- What’s the term?
- What happens if rates stay high?
3. Be Patient
You don’t have to invest just because you have money.
Sometimes waiting is the smartest move.
4. Look for Real Value
Don’t chase hype.
Look for deals that make sense today, not based on hope.
Final Thoughts
Here’s the truth…
There is still opportunity in today’s market.
But it’s not where it used to be.
And it’s not as easy as it used to be.
The investors who win in this environment are the ones who:
- Stay disciplined
- Adapt quickly
- Think long-term
- And don’t follow the crowd
So the real question is: Are you going to react to the market… or are you going to position yourself to create your future?
Because that decision will determine everything.