In the spring of 2020, store shelves were empty. And supply chain issues have disrupted businesses of all kinds ever since—including real estate.

But what, exactly, is causing these problems in the supply chain? And when will things get back to normal?

Jeff Davis is both a supply chain expert and real estate investor, serving as a senior sales executive for a Fortune 100 global logistics firm and Managing Partner at Bridgestone Holdings, where he has built a portfolio of 952 units.

On this episode of Financial Freedom with Real Estate Investing, Jeff joins Garrett and me to explain what is causing our ongoing supply chain issues and why things haven’t normalized since the pandemic.

Jeff discusses how rising interest rates impact the supply chain and shares his take on when construction costs might return to pre-COVID levels.

Listen in for Jeff’s insight on underwriting deals in the current economic environment and learn how to navigate supply chain concerns as a multifamily investor.

Key Takeaways

Jeff’s background in the logistics business

  • Started in desk-level data entry job
  • Help customers solve problems worldwide

How Jeff got into the real estate industry

  • Wanted to provide stability for family
  • Began with single family side hustle

What inspired Jeff’s shift to multifamily

  • Couldn’t scale single family business
  • Start from ground zero with each project

The steps Jeff took to get into syndication

  • Joined community to get educated
  • Leverage sales background to raise capital

What caused the supply chain issues since COVID

  • Shutdown drove demand for consumer goods
  • Slowdown in labor at ports, vessel turns
  • Prices for shipping containers skyrocketed

Why things haven’t normalized since the pandemic

  • People not coming back to work
  • Takes time for prices to level out

How rising interest rates impact the supply chain

  • Capacity eases congestion
  • Put brakes on inflation but recession likely

Jeff’s outlook on the real estate market

  • Headed into slowdown
  • Construction prices normalize in 6 months

What Jeff is looking for in a deal right now

  • Solid fundamentals
  • Strong occupancy
  • Acceptable risk profile

Why it’s challenging to get a deal done right now

  • Sellers still asking for 2021 prices
  • 50% down payment on agency debt
  • Expensive to do bridge deal

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