Ep 83: Negotiating Market Cycles Since the Mid-2000s with Colin Murphy
Today we talk to Colin Murphy about real estate trends across the past few market cycles, and the creative pivots he has made based on different challenges and opportunities over the years. Colin is currently a traditional fix-n-flipper who buys and renovates single-family homes in the Tampa market and sells to out of state investors. He has had an interesting and dynamic career before this though, having been based in London and Madrid for many years before moving to the U.S, engaged in a range of different scenarios, and he kicks things off talking about this journey. We get into trends in the mid-2000s of madly buying properties in emerging markets, Colin’s place in all this, and how he pivoted into scooping up condos in the U.S post-2008, only to pivot again into his current fix-n-flip model thereafter. From there, we take a deeper dive with Colin into how he orchestrated his move from Madrid to the U.S with his Spanish wife and kids, how he learned the U.S market, and what he did to scale his business after him and his family was settled. Toward the end, we talk to Colin about mortgage defaults in the U.S and how he is adjusting his business models, partnerships, and family plans in the post-COVID landscape. For an engaging and technical conversation about risk, reward, and creative problem solving, be sure to tune in.
Key Points From This Episode:
Introducing Colin and the real estate business models he has worked within the US and Europe.
Colins career pre-2008 and how he pivoted into buying Florida condos after that.
How Colin pivoted again into fix-n-flips after the condo opportunity dried up.
Mid 2000 and 2010-14 trends of buying cheap real estate in emerging markets with no sense of risk awareness.
The idea that cheapness does not mean less risky; getting burned by not realizing this.
Colin’s strategy and what he buys these days to avoid gambling and taking on too much risk.
How Colin felt the 2008 recession and build a leaner business with less staff after.
The difference between causes for this crisis versus the last and how it is affecting risk awareness.
The story of loan borrowers in forbearance suing Wells Fargo for taking this action on them.
Whether the high equity people have in homes is enough to prevent foreclosures.
How unemployment, equity, foreclosures, and bank ownership will affect deals on the market.
What moving to the U.S from Madrid involved for Colin as far as buying real estate, being a foreign citizen, and having a family.
How Colin was able to scale efficiently after a year and a half in the U.S by leveraging technology and good teams.
Colin’s approach to running his business remotely as far as strategizing and management.
How Colin is constantly readjusting his strategy in response to the COVID, the stimulus package, and the looming downturn.
Difficult conversations Colin had with his partners who had more aggressive strategies after COVID.
Colin’s family commitments after COVID and how his passive income is helping.
Tweetables: “The Irish and British went completely nuts in the mid-2000s for real estate and lost all sense of risk awareness.” — @ColinInvestment [0:08:15]
“I don’t know how long it is going to take but you have to figure that eventually, the banks are going to control a ton of real estate again just as they did ten years ago.” — @ColinInvestment [0:24:27]
“The forbearance might not cause a spike in foreclosures because of the equity but the unemployment will cause a spike in foreclosures. That’s the biggest predictor of mortgage defaults, is unemployment.” — @ColinInvestment [0:24:50]
“I think the wealth-generating possibilities are further down the line, just as the people that were able to buy real estate in 2010, 11, 12, 13, and hold it – they generated real wealth.” — @ColinInvestment [0:41:37]
Links Mentioned in Today’s Episode:
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