Why Property Managers Should Remind Clients to Refinance NOW

Why Property Managers Should Remind Clients to Refinance NOW

2 min read
Drew Sygit

Drew is a classic overachiever, bringing intensity and passion to everything he does. While in the mortgage business, he rose to a VP position at the first broker he worked for and then started his own company.

In the pursuit of excellence, Drew obtained several mortgage designations and joined mortgage and several affiliate association boards. He also did WebX presentations and public speaking engagements. It was during this time, he started personally investing in single family rentals, leading him to start Royal Rose Property Management with two partners. He also joined the board of a local real estate investors association, eventually becoming its president.

The real estate crash led to an offer from the banking industry to manage a Michigan bank’s failed bank assets they acquired from the FDIC. The bank went on to eventually acquire four failed banks from the FDIC, increasing from $100MM in assets to over $2B while he was there. After that he took over as president of Royal Rose Property Management and speaks at national property management conventions.

Former board member of Michigan Mortgage Brokers Association, Financial Planners Association of Michigan & Mariners Inn (nonprofit)

Former taskforce Member of Michigan Association of CPAs (though not a CPA)

Involved in mortgage business for over 18 years, obtained mortgage designations: Certified Mortgage Planner, Certified Mortgage Consultant, & Certified Residential Mortgage Specialist

Board member of Real Estate Investors Association of Oakland; President since 2012

2009-2012 Shared-Loss Manager for Talmer Bank (now Chemical Bank) handling FDIC failed bank loan loss strategy, reporting, REO management, collections, & gap analysis

Started investing in real estate in 1996

President of Royal Rose Property Management since 2001

Drew received an MBA from Wayne State University, concentration in Finance & Marketing.



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“There is no formula or mechanical answer I can give you,” said Federal Reserve Chairwoman Janet Yellen when the ranking member of the Senate Banking Committee pressed her for details about the Fed’s plans for continuing the Quantitative Easing and Zero-Interest policies that have propped the economy up since 2008. “The economic outlook is very uncertain.”

While that might seem to mean nothing at all, to someone familiar with the lingo of the Fed, it speaks volumes.

In short, it means that we need to keep doing what we’re doing for a while longer until things start looking more certain. To make that even more explicit, it means that interest rates are going to remain as close to zero as Federal money policy can make them.

What Does This Mean to Me?

To turn that into actionable advice, that means that now is a good time to refinance any mortgages you have on any properties you own — especially investment properties.

The 10-year Treasury bond rate — which typically predicts changes in mortgage rates — is currently at one of the lowest points it’s been all year (it began the year at 3%; as I write this, it’s at 2.35% — the only single day it has been lower during 2014 was on August 15th).

The 10-year treasury rate usually operates about 2-3 weeks ahead of the mortgage rate, which means about the time you read this, it will have “trickled down,” and mortgages ought to (provided no major market shocks in the interim) be near the lowest they’ve been all year.

The Long and Short Of it

Yellen noted that, while the housing market “has recovered notably…readings this year have, overall, continued to be disappointing.” In other words, the market still needs whatever massaging the Fed can give it in the short term.

Related: Refinance Before Making Late Mortgage Payments

But in the long term, the Federal Reserve lawmakers have clearly indicated that they fully intend to slow down the Quantitative Easing purchases that have been flooding the market with fresh capital — and that they intend to ease the interest rates back up sometime next year.

In other words, every indication is that in the short term, refinancing is a great idea — and only in the short term. If you wait, the likelihood is very good that you’re going to end up paying more than if you don’t.

Reasons to Refinance

There are more reasons than just a low rate to refinance — though the low rate makes all of them more pleasant.

You can use a refinance to shift from a 30-year to a 15-year mortgage and pay off a loan faster; you can shift from an ARM to a fixed-rate loan; you can even — if the circumstances actually make it a wise idea – increase your cash flow by refinancing to another 30 year loan and lower your payment or cash out some of your equity and use it to reinvest or pay off other nastier debts.

Related: Refinance pitches: Lessons Not Yet Learned

As property managers, it’s part of our job to understand these facts — as well as the condition of the market — and be able to use them to our clients’ advantage. By keeping up and offering sound advice, we can be more than just “that guy who keeps the rent coming in.”

We can be “that guy I trust with my portfolio,” and that is precisely where we should aim to be.

What’s your view of the current economy? Will you suggest that your clients refinance?

Leave your opinions below!

“There is no formula or mechanical answer I can give you,” said Federal Reserve Chairwoman Janet Yellen when the ranking member of the Senate Banking Committee pressed her for details […]