Scott Trench’s $1,000,000 Bet on Real Estate (Did It Pay Off?)

Quick Overview

Scott Trench admitted he would not make his previous $1 million stock portfolio bet today, stating that while he still believes in real estate's long-term benefits, the current market conditions, particularly low rent growth, high interest rates, and increased supply, make it a more challenging environment for new investors than it was a few years ago.

Key Points: Scott Trench sold $1 million of his stock portfolio a year prior to invest in paid-off real estate in Denver, a decision that resulted in a 15% return for the S&P 500 in the following year. Trench's current real estate portfolio allocation is roughly 45% in real estate equity (multi-family in Denver) and 55% in stock market investments (including index funds, Roth, HSA equivalents). Trench forecasts that 2026 rent growth will be much more muted (3-4% range) compared to the double-digit growth seen in 2021-2022 due to factors like high interest rates and slowing demand. He notes that the current Denver market has low vacancy rates but also high property prices and low cap rates (around 6.5% for a duplex he underwrote), which makes finding deals harder. The primary challenge for investors now is that nobody is being forced to sell properties, unlike during the 2010s when foreclosures and life events drove supply. Trench advises that while real estate remains a solid way to build wealth and achieve financial freedom, new investors should exercise caution and potentially be more conservative with leverage than they might have been previously. The discussion concludes with the comparison between stocks (which are 'out of my control') and real estate (which he feels he has more control over via house hacking or management).

Context: This is an interview segment from the BiggerPockets Real Estate Podcast, hosted by Dave Meyer, featuring guest Scott Trench, who is the Head of Real Estate Investing at BiggerPockets and author of "Start with Strategy" and "Real Estate by the Numbers." The conversation centers on comparing Trench's past investment decisions (moving capital from stocks to real estate) with the current market outlook for 2026, focusing on whether his current real estate-heavy strategy remains sound given changing economic factors.