Brian Burke is the founder and CEO of Praxis Capital, a real estate investment firm he built over a 36 year career that has acquired more than a billion dollars in property, spanning apartment buildings, senior housing, single family homes and even a lakefront resort. He's also the author of Hands Off Investor, a guide to passive real estate syndication. It hasn’t been all smooth sailing though and in 2009, Brian received an expensive education when he bought a 60 unit apartment complex in Dallas for half of what the previous owner had paid, with the bank financing the entire purchase. Both of those things felt like a win at the time.
"I spent four years paying the mortgage payment on that property out of my own pocket, and it was a $15,000 a month mortgage payment."
The recession hit right after he closed, and a deal that looked clever with none of his own money in it turned into four years of writing checks just to keep it alive. Brian says the lesson reshaped how he invests now to ensure that he doesn’t find himself in the same situation.
Brian is watching this same pattern play out across the apartment market right now and says it's been a rough stretch for the past four years. Some owners have lost properties to foreclosure and wiped out their investors completely while others, his own company included, are getting through it fine. The properties themselves aren't that different but what separates the two groups is how much of the purchase was financed with debt, and how much room that left when the market turned.
"It's a lot easier to lose a million dollars than it is to make a million dollars. So take care of the money that you have and choose wisely."
If you're looking at a real estate investment right now, ask directly how much of the deal is financed with borrowed money and how much is the sponsor's own equity, then ask what happens to the investment if income drops for an extended stretch. A sponsor who has actually thought that through will have a specific answer, while one who hasn't will change the subject.
Melissa’s Take:
Brian’s talking about real estate. I hear a different asset class. I think about this every time I get excited about a good price on something in my own business: a lower rate, a discount, a deal that looks like I got away with something. I rarely stop to ask what happens if the thing I’m buying doesn’t perform the way I’m hoping it will. I’ve made calls that felt smart in the moment because of what they saved me, not because I’d actually worked out what I’d owe if the plan didn’t hold.
This is the same failure mode I see constantly in security posture, just wearing a different outfit. A company underinvests in detection or response capacity because the breach hasn’t happened yet, and for a while that looks like discipline: leaner spend, nothing wasted on a problem that isn’t visible. Then the incident hits, and the bill isn’t the cost of the fix, it’s four years of paying down an exposure nobody sized correctly on the way in. Debt and unmitigated risk behave the same way. Both are quiet right up until they’re not, and both charge interest the whole time you weren’t looking.
There’s a difference between a deal that’s cheap and a deal that’s survivable, and most of us only find out which one we made after the market, or the threat actor, stops cooperating. Cheap is about the price you paid. Survivable is about whether you can still make the payment if the next four years don’t go your way.
Here’s the gateway action: pull up the last big financial decision you made in your business, and instead of asking whether it was a good deal, ask what it would cost you every month for four years if things went sideways right after you signed. If you don’t actually know the answer, that’s the decision to revisit first.
Cheap is a number. Survivable is a plan. Most people only budget for the number.
There's more in the full conversation, including why Brian shifted his focus to senior housing in 2025, the demographic wave he thinks is behind it, and how he actually verifies a sponsor's track record when there's no independent source that will do it for him.
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