MFREE 117 Trailer # 5 with Kevin Bupp: Why is consistent cash flow more important than a rising market?

Aloha, It’s Shelon "Hutch" Hutchinson here! If you’re enjoying 'The Multifamily Real Estate Experiment' podcast, please like, comment, and share our episodes to help us reach and inspire more people. Thank you for your support!

In this episode, Kevin Bupp shares the hard truth about what went wrong early in his investing journey. His portfolio in Florida was built mostly on appreciation, not durable cash flow. And when the market turned, it turned fast.

Rents dropped. Jobs disappeared. Occupancy slipped. Even with low leverage and built-in equity, many properties lost 50 to 60 percent of their value in one year. It wasn’t sustainable.

Kevin explains how that experience reshaped his entire approach. Today, it’s all about conservative underwriting, real stress tests, and making sure properties can stand up to worst case scenarios.

This one is a wake-up call for anyone still playing the appreciation game without a backstop.

 #RealEstateTruth #CashFlowOverHype #RiskManagement

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Episode Transcript

Speaker 2 (00:00):
Florida's a very cyclical market.
It goes to really high peaks andit goes to lows.
and that's typical of a lot ofthe coastal markets.
while I made some cash flow, itwasn't durable enough to
withstand, negative impacts thatoccurred, during that period of
time.
A lot of folks say rents nevergo down.
That was not the case.
there were, periods of timewhere we had, oversupply of
homes here in Florida, and sothat, that impacted our rental

(00:21):
portfolio.
In addition to that, when theystopped building new homes, a
lot of the jobs went away.
There weren't as many, thepopulation, slightly decreased
in Florida.
Folks had to move other placesto find work.
And so we had challenges,maintaining occupancy.
And so once you start stackingall the challenges, maintaining
occupancy, lowering our rents,offering concessions, we had
challenges being our debtservice.
And in addition to that, the,values of these properties, even

(00:44):
though we had low leveragepoints, we had, built in equity,
a lot of them within a period ofa year.
We're upside down in value, evenif our leverage point was in the
60% range, so we were prettyconservative generally speaking.
But, you know, we lost nearly 50or 60% of the value in a period
of a year.
that value has since come back,but we didn't have the
durability to weather thatstorm,