What is Defcon 3 in Multifamily Real Estate Investing

Today on the Heartland Multifamily Show, Trot and I are talking about Defcon 3. What is it? Why do investors get to Defcon 3? How can you get out of Defcon 3, and what opportunities are there if you want to buy a property that’s at Defcon 3? Defcon 3, meaning Defense Condition 3, is a phrase that dates back to the Cold War. The Defense Condition went from Defcon 5, meaning peaceful but aware of threats, to Defcon 1, which is a full-scale nuclear attack. This analogy also applies to multifamily real estate investing. When you are at Defcon 3, you are inching closer to disaster, but you have the opportunity to right the ship before things get so bad that you can’t fix them. And on the other side of it, if you are an investor who sees another property at Defcon 3 and you have done your due diligence, you can get a good deal to buy and fix up a property that the previous owner has mismanaged. Watch this episode to learn the basics of Defcon 3.