Best Real Estate Investing Strategy for 2026: Small Multifamily, BRRRR, and Smart Leverage

JOSEPH V. SCORESE (00:00)
I mean, this is not a sit and wait market. It’s a position and execute market. So positioning your 5 million against good performing debt is going to be extremely smart and leaving the proper reserve base so you don’t find yourself exposed with those assets, leveraging that 5 million. I wouldn’t put all 5 million in. Like I said, I would leverage that against good performing debt. So how you sit and structure the deal is going to be way more important than the rate itself.

Scott Bursey (02:00)
Real Estate Pros podcast powered by Investor Fuel. I’m your host Scott Bursey. And today we are absolutely firing on all cylinders pros. We’re bringing in a heavy hitter. This Titan is not just playing the game, but rewriting the playbook. My guest today is Joseph V. Scorese And believe me, Joseph brings the kind of fuel that powers massive deals and innovates financing strategies. Get ready to supercharge your knowledge because this episode

So it is high octane from the jump. Joseph, welcome to the show.

JOSEPH V. SCORESE (02:34)
Thank you, Scott. Good morning.

Scott Bursey (02:35)
Good morning. What really caught my attention about you was the way that you’ve been able to secure and facilitate complex multimillion dollar deals in today’s tricky lending landscape. That requires serious foresight.

JOSEPH V. SCORESE (02:47)
Yeah, mean, basically, ⁓ that’s all right. No, we were talking about before my core strengths and staying focused on market insight and timing and deal structuring expertise and having an investor mindset and ⁓ being very focused on a relationship drive of building those relationships out there and staying in part of the execution of follow through for my clients.

Scott Bursey (02:47)
go ahead. Go ahead, Joe.

Absolutely. And please tell us how did your career begin and what is your main focus now, Joseph?

JOSEPH V. SCORESE (03:17)
So I’m a former CPA. I was a forensic auditor for the state of New Jersey. I was auditing banks back up to about 2001, then matriculated into the banking industry, origination, underwriting, processing, and worked at regulated banks for approximately 15 years, then was approached by a non-QM hedge fund that was opening up a direct private lending platform ⁓ and transitioned pretty easily over.

and was a regional development manager originally and then built my way up through a couple other hedge funds over the last 10 years. And I am now a senior regional development manager, vice president for a platform now providing non QM lending, DSCR, fixed to rent, fixed to flip and ground construction.

Scott Bursey (04:04)
All right, Joseph, let’s look at your world of high level real estate finance and dive right on in. What is the single biggest strength you see in commercial real estate right now in your view?

JOSEPH V. SCORESE (04:16)
Adaptability in changing markets, I think, is probably the most important piece because I think thrives in both high-rate, low-rate environments by adjusting strategy, not just waiting for it.

Scott Bursey (04:24)
That’s some clarity. Awesome. And Joseph, if you could help us understand, where do you see the most common weakness in a developer’s capital stack request today?

JOSEPH V. SCORESE (05:24)
I really feel like you have financing constraints and rising interest rates. That combination, I think that bottlenecks up some of the investor today. And then obviously there’s market uncertainty. And at the same time, that same client is trying to scale and it has scaling challenges, hitting a growth ceiling. So they’ve got to learn how to build out systems and delegate and leverage their power team.

Scott Bursey (05:48)
That is absolute rocket fuel for our listeners. Thank you for that. And what is your strategic plan for let’s say the next 12 to 18 months?

JOSEPH V. SCORESE (05:57)
I’m going to focus in on the residential landscape of 1 through 4 units, DSCR loans, the BRRR strategy, buy, renovate, rent, refinance, and redo. There’ll be some flipping involved there and maybe some opportunities in the flipping piece for my investors. And then the multifamily space, I’m to be very focused on that 5 unit to 12 unit multifamily space, maybe go up to 20 depending on the asset and location of the property. They’re going to have some refinancing challenges, all of them.

depending on market values and rent strength in those markets, but I think there’s still going to be a great opportunity for investors to get in with the SCR and a rehab construction loan such as a BIRD strategy.

Scott Bursey (06:41)
the exact spark that starts the fire. Thank you for that Joseph. And if you could help us break down this. If you, you know, in the next 12 months, let’s say, what niche asset class holds the greatest opportunity for savvy investors?

JOSEPH V. SCORESE (06:56)
For the sovereign investor, I think it’s really the small balance multifamily between 5 and 12 units. Not as much competition. It’s under a lot of thresholds and over a lot of thresholds depending on the investor experience level. So I personally think that 5 to 12 space is still a great market as long as you identify a value add, ⁓ potential opportunity for yourself, or even a potential conversion.

know, a small commercial office being converted to a 5 to 12 unit. I mean, all the mechanics are there. It’s just a matter of just kind of moving it into the residential environment.

Scott Bursey (07:33)
Joseph, I hear you on that. Value add, multifamily, and purpose built industrial are consistently showing strong performance due to changing demographics and supply chain needs. Spot on.

JOSEPH V. SCORESE (07:46)
Yeah, I think there’s a very strong opportunity there. I think it’s happening in almost every urban setting throughout the country and even some of the suburban markets.

Scott Bursey (07:54)
Absolutely. Joseph, curious about this. What macroeconomic factor currently poses the greatest external threat to deal flow in your eyes?

JOSEPH V. SCORESE (08:03)
I personally think liquidity matters more than ever. Deals go to those who can close quickly and confidently. And then you got to really keep in mind, debt is no longer cheap, it’s strategic. So how you structure financing equals your competitive edge.

Scott Bursey (08:18)
Absolutely. Yes, again, spot on in my view as well. If someone’s listening to this and they’re thinking, hey, this is someone I’d want to partner with or learn from, what do you want them to know about your operation first?

JOSEPH V. SCORESE (08:31)
I mean, listen, I want somebody to understand how to buy based on today’s prioritizing their cash flow and margins. So we’re to have discussions about that. lock in control, not perfection. So don’t wait for the bottom. Good investors are controlling assets during uncertainty. I feel like expect distress to increase. Liquidity wins the deal. So always have foresight to your liquidity to what you’re buying.

know, structure is more important than rate right now. So if you’re structuring correctly, I think you’re thinking correctly. If you’re not as focused on the rate, as long as it deal with structures itself correctly.

Scott Bursey (09:08)
is perfect. I gotta ask you this, what’s one thing you’re still trying to figure out or working around recently?

JOSEPH V. SCORESE (09:51)
I think meeting the right investor, identifying the right events to be in attendance of. I there’s so many events. mean, if I could cut myself into three pieces, I could be at three events a night, but do those events make sense? So it’s always about micro.

managing your calendar of events and who you want to surround yourself with. Because if you surround yourself with five dumb people, you’re going be a very dumb person. If you’re going to surround yourself with five brilliant people, you’re going to become brilliant. And I feel like that’s… I’d rather be in a more qualitative event than a quantitative event.

Scott Bursey (10:27)
circle of people that you’re around is everything Joseph and on that note what sort of groups are you involved in this could be like investment groups peer groups networking groups that sort of thing

JOSEPH V. SCORESE (10:39)
You know, post COVID, there’s been a lot of rogue investor group meetings established that have a pretty good reputation. ⁓ And some of the local REIA groups are getting a little more modernized instead of being so predictably old fashioned, because they realize the old ways of doing things just don’t work. So I blend the two. I I focus strictly with the investor.

Mindsetted events. I’ll mix it in with some real estate agent events as long as I feel like there’s going to be an opportunity to meet investor friendly realtors and that’s kind of an oxymoron because not everybody wants to become a an investor friendly realtor so it’s very hard to kind of Pinpoint which events to go to and in that space as well But I do teach a CE course for licensed real estate agents on asset-based lending So I leveraged that as kind of a shoehorn to get in front of a lot of real estate groups or offices or teams

to allow myself to educate them and provide CE to them in asset-based learning and non-QM learning.

Scott Bursey (11:42)
You just gave our listeners a stellar blueprint. And I must ask you, what do you feel is the biggest opportunity right now as far as this could be like a market shift that you may be watching, Joseph, a new offering or maybe just a part of your operation that you’d to double down on?

JOSEPH V. SCORESE (11:57)
I would say strengthen your maintenance team and your management team for your portfolio because those are the most important pieces of the team that’s going to allow you to grow and scale as a real estate professional because non QM lending didn’t exist 20 years ago where you could buy unlimited amount of real estate with no tax returns, no pay stubs, no W2s, no 1099s. just need bank statements and keeping your credit above 700 and focusing everything through your LLC or LLCs.

is going to be extremely important going over the next five years.

Scott Bursey (12:30)
extremely important. And as far as market risk, what do you see out there as far as maybe threats, ⁓ know, access ⁓ to deal threats, things of that variety, variety that you may be paying close attention to now.

JOSEPH V. SCORESE (12:45)
Waiting for the perfect rate, waiting for the perfect deal, ⁓ be very disciplined and selective, but yet be aggressive when others are hesitating. Harvesting the upside as long as there’s really an upside. Don’t create something that’s just not there. Don’t create a market value or rent market value that doesn’t exist anywhere in that same market.

Scott Bursey (13:05)
And Joseph, if you could give us the play by play on this. If you had to choose, is a conservative valuation or a low leverage position more critical for success in this market?

JOSEPH V. SCORESE (13:17)
My smartest investors are saying very under leverage, meaning there’s somewhere between 60 and 70%. They’re not maximizing leverage at 75 or 80 % because they feel that we’re going to see some ⁓ depreciation on values or concerns with DSCR compression. So they’re being a little more conservative, expecting something for the worst than the best.

Scott Bursey (13:38)
It’s all about protecting downside. Couldn’t agree with you anymore. Joseph, now it’s time for the pro money question where you supply the high octane fuel. This is a deep dive, Joseph. So you spend your days navigating the complexities of capital markets for real estate. If a dedicated real estate investor, a pro with 5 million in deployable capital came to you today.

What is the advice, like a strategy or a principle, that you would give them to maximize their return while minimizing risk over, let’s say, the next five years?

JOSEPH V. SCORESE (14:56)
I mean, this is not a sit and wait market. It’s a position and execute market. So positioning your 5 million against good performing debt is going to be extremely smart and leaving the proper reserve base so you don’t find yourself exposed with those assets, leveraging that 5 million. I wouldn’t put all 5 million in. Like I said, I would leverage that against good performing debt. So how you sit and structure the deal is going to be way more important than the rate itself.

Scott Bursey (15:24)
makes perfect sense. Is there any key takeaways or advice you’d like to leave with our listeners here today?

JOSEPH V. SCORESE (15:31)
I mean, building out your team of experts, including a strong lender is going to be extremely important for your underwriting, your evaluation. Being a shopper and shopping your team of experts, you will wear your team of experts out thin and they won’t find themselves to be very integrist toward you because there’s going to be a trust factor that they’re constantly being shopped. So if you don’t have any form of loyalty in this space, it’s traditionally picked up within strong intuition by strong players in the market.

And they’re going to kind of be very cautious in working with you.

Scott Bursey (16:04)
Joseph, this has been incredible. The level of insight that you’ve shared navigating capital markets has been extremely valuable for our listeners here today.

JOSEPH V. SCORESE (16:12)
Thanks, Scott.

Scott Bursey (16:13)
And for those of our listeners that want to follow your journey or collaborate with you, what is the best way for them to reach you?

JOSEPH V. SCORESE (16:18)
I have a website josephvscorese.com josephvscorese.com where they can text or call me directly at 215-290-5108.

Scott Bursey (16:31)
Joseph, thank you so much for joining us today.

JOSEPH V. SCORESE (16:35)
Thanks, Scott. Really enjoyed it.

Scott Bursey (16:37)
This has

been an absolute pleasure. And to our listeners, thank you. We appreciate each and every one of you. If you got value from today’s episode, please subscribe. We’ve got a lineup of exceptional guests, just like Joseph, who are making huge moves in the market. Until next time, keep your standards high and your vision clear. We’ll see you in the next episode, everyone.