Cracks show in the multifamily market; NAR’s big, bad year ... and more

The best national real estate stories from The Real Deal. Oct 07, 2023 [View in Browser]( | [$1 for 1 Month]( [The Real Deal Logo](   [The National Logo](   In today’s newsletter, we look at how Brad Sumrok built an empire as a multifamily mentor to inexperienced investors, and how that [empire may come crashing down](. Plus, a former New York player [runs into trouble in Miami](, Stefan [Soloviev embraces farming]( in the Hamptons, and [NAR’s big, bad year]( continues. These and more stories below.   [Multifamily mentor Brad Sumrok built an empire. Now, the cracks are showing]( Brad Sumrok, the self-anointed “apartment king,” has his pitch down: By investing in apartments, anyone can achieve financial freedom. His mentorship program, which costs thousands of dollars (and sometimes much, much more), teaches multifamily syndication, a form of investing espoused by the likes of Tides Equities. Sumrok says he’s “created over 600 millionaires,” and that he has “never lost anyone’s money.” Students, enamored by his extravagant lifestyle and success stories, eagerly joined. In years past, when interest rates were low and rent growth was hot, Sumrok’s game plan seemed foolproof. His students did $1.5 billion in deals in 2021. One investor, Jay Gajavelli of Applesway Investment, built a portfolio worth over $200 million. But, as the multifamily market took a turn for the worse, cracks began to appear in Sumrok’s empire. Rising construction costs, soaring interest rates, and slipping rent growth caused several deals, including those backed by Sumrok, to bleed cash or fail outright. Gajavelli’s Houston portfolio was foreclosed on by lender Arbor Realty Trust. Critics argue that Sumrok’s coaching failed to prepare students for the market's volatility. They claim he encouraged risky practices, like borrowing with floating-rate debt, leading to huge financial losses for inexperienced investors. Some deals touted as “Sumrok-reviewed” relied on outdated market data, leaving investors blindsided. While larger syndicators have a chance to salvage deals, smaller investors, lured by Sumrok’s promises, have been hung out to dry. Despite the mounting troubles, Sumrok continues to defend his methods, asserting that his deals haven’t lost money due to his careful approach. “Our mission is to lead and teach and inspire and mentor over a million people to achieve financial freedom,” Sumrok said at the start of a recent conference. “Investing in apartments is the best way I know how to do that.”   Advertisement   [I'm an image]( [NAR’s moment of truth arrives]( It’s been a big, bad year for the National Association of Realtors. The trade group is facing external lawsuits and internal turmoil. Now Redfin has ordered its agents to cut ties with NAR, but [the breakup will be messy](. [I'm an image]( [Soloviev pursues billion-dollar enterprise on North Fork]( Stefan Soloviev is heir to Sheldon Solow's real estate empire. But, he’s more likely to describe himself as a farmer and, perhaps more importantly, a father to his 20-plus children. That hasn’t stopped him from making huge real estate moves, though, especially on the far East End of Long Island. [I'm an image]( [Yair Levy ran out of money to finish downtown Miami building, diamond dealer’s lawsuit alleges]( Yair Levy's ambitious project to transform a Miami office and retail building into a high-end jewelry destination has hit a roadblock. Levy, banned from selling condos in New York, allegedly lacks funds to complete renovations at his Time Century Jewelry Center.   Advertisement   [I'm an image]( Resi Rankings: [LA’s top brokers](, [Chicago’s top brokerages]( It’s been a tough year for the residential industry. Many teams saw sales totals drop as the market came down from 2022’s wild highs. But the best of the best have managed to weather the storm. TRD ranked [LA’s top brokers]( and [Chicago’s top brokerages](. [I'm an image]( [How co-ops are coping with a changing world]( Once upon a time, owning in New York meant owning a co-op. Now buyers and developers alike have turned to condos, forcing co-op owners to find creative ways to stay relevant. [I'm an image]( [“Airbnbust” rocks New York’s short-term rental landscape]( An Airbnb guest in Brentwood has overstayed her welcome, [staying in the home for 540 days]( without paying rent. Yikes! You won’t see the same problem in New York, where short-term rental restrictions have rocked the company’s hosts, putting what some have called a de facto ban on the platform. But rental landlords and hotels could benefit. [I'm an image]( [Parkway Ventures acquires 3M sf Houston portfolios]( At a time when so many investors have backed away from commercial purchases, Parkway Ventures is going all in. While the price is unclear, the properties have been valued at nearly $350 million, making it likely that the deal sits among the biggest in Texas this year. [I'm an image]( [Silicon Valley bucks national trend with biggest uptick in home listings]( Silicon Valley likes to go against the grain, and the region is doing that when it comes to residential real estate. With home listings down across the country, the San Jose metro saw a 7-percent jump in listings in September.     [The Real Deal Logo]( [Facebook]( [Twitter]( [Instagram]( [LinkedIn]( [YouTube]( [Manage Newsletters]( | [Unsubscribe]( | [Privacy Policy]( | [Subscribe]( | [Advertise]( The Real Deal 450 West 31st Street, New York, NY 10001 ©2023 TheRealDeal. All rights reserved. [View Online](