Scott Trench’s $1,000,000 Bet on Real Estate (Update) - BiggerPockets Real Estate Podcast Recap

Podcast: BiggerPockets Real Estate Podcast

Published: 2026-01-21

Duration: 35 min

Summary

In this episode, Scott Trench returns to discuss his year-long journey of reallocating $1 million from stocks to real estate, reflecting on the market shifts and his investment performance. He offers fresh insights on the current investment landscape and shares his plans moving forward.

What Happened

Scott Trench joins Dave Meyer to revisit his bold decision from a year ago when he sold $1 million from his stock portfolio to invest in real estate in Denver. With the S&P 500 seeing a 15% increase since then, Scott reflects on his investment choices and the outcomes. He shares that he acquired a quadplex and a duplex, achieving a cap rate of approximately 6.42% on the quadplex and anticipates a higher cap rate for the duplex once stabilization is complete.

Despite experiencing a paper loss of around $100,000 due to the stock market's rise, Scott remains confident in his real estate investments. He emphasizes the cash flow generated from the properties, which provides him with financial freedom. The conversation delves into Scott's philosophical approach to investing, acknowledging the risks in both real estate and the stock market, and the importance of making informed decisions based on market conditions.

Key Insights

Key Questions Answered

What were Scott's predictions for the 2025 stock market?

Scott acknowledges that his predictions for the stock market were off, admitting that he had expected the S&P 500 to be at all-time highs and had concerns about irrational exuberance. He expressed a lack of understanding about the market's valuation metrics, leading him to divest from stocks. His strategy was to move into paid-off real estate, which he believed would provide better returns.

How did Scott's real estate investments perform in the past year?

Scott reported that his quadplex investment achieved an annualized cap rate of 6.42%, aligning closely with his expectations. He also shared that he acquired a duplex, which required some stabilization work, but anticipated that it would yield positive cash flow once completed. Overall, he felt satisfied with his decision to invest in real estate despite the stock market's gains.

What is Scott's perspective on the risks of stock market investments?

Scott reflects on the risks associated with stock market investments, noting that he didn't predict a crash but felt the probability of a downturn was increasing. His decision to reduce exposure to equities was a strategic move to mitigate risk and ensure he was more secure in his investments. He emphasizes the importance of balancing risk and reward in any investment strategy.

What tools is Scott developing for financial planning?

Scott is focused on creating a DIY financial planning toolkit aimed at helping investors manage their financial situations more effectively. He notes the frustration many face in finding suitable resources and templates for financial planning, especially those with complex portfolios. His goal is to provide basic templates, calculators, and resources that can assist individuals in setting goals and making informed investment decisions.

What lessons did Scott learn from his investment decisions over the past year?

Scott emphasizes the importance of cash flow in real estate as a key takeaway from his investment decisions. While he acknowledges the missed opportunities in the stock market, he remains steadfast in the belief that his real estate investments will provide stability and income. He underscores that every investment decision carries risk, and it's essential to focus on long-term results rather than short-term fluctuations.