Interest rates have just increased to 7%. How have your real estate plans change?
With recent issues with the debt ceiling and summer market coming up. We've been through many fluctuations since the start of 2022. To the Bigger Pocket community - are you doing anything different this year due to the recent rate hikes?
#3 Buying & Selling Real Estate Discussion Contributor
Quote from @Ran Iarovich:
With recent issues with the debt ceiling and summer market coming up. We've been through many fluctuations since the start of 2022. To the Bigger Pocket community - are you doing anything different this year due to the recent rate hikes?
Yes , buy with 5% rate.
I guess if one is waiting until 2024 , it would be too late, home market is already rallying like there is no tomorrow
#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
- Investor
- Austin, TX
Holding loans with extremely low interest rates. Via subject to or owner finance.
@Ran Iarovich- thanks ...fyi - in additon to the rates continuing to climb to the 7% range - the loan fees for rental properties that most lenders are charging are as high as they have ever been ...trying to get a rental proerty loan with a loan fee ( points ) under 3% is a challenge at times
Quote from @Ran Iarovich:
With recent issues with the debt ceiling and summer market coming up. We've been through many fluctuations since the start of 2022. To the Bigger Pocket community - are you doing anything different this year due to the recent rate hikes?
Personally I believe that there is a opportunity in every market. Rates 📈 home prices 📉. You just have to be consistent and keep a eye out. Then once interest rates lowers and the numbers make sense, refinance!
Ran - with interest rates up as they are, try running your numbers with a higher down payment, which could improve returns but will tie up more cash.
I think it makes a lot of sense for investors to hold a real estate license. I saved $24,000 in commission last summer when we sold a duplex, and am set to make $17,000 in commission on a property we will close on later this week. That $17k is going straight to a 3 point permanent rate buy down putting us in the mid 5s.
#4 All Forums Contributor
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@Ran Iarovich
We invest in notes, so higher interest rates are better for us
@Ran Iarovich - to answer your question, no. We are doing everything exactly the same - look at the deal, run the numbers, and buy if it works as either a LTR, MTR or flip. Now, we are finding more deals in 2023 that work as flips than LTRs, so I guess that would be the only difference.
The did come down about .5% yesterday.
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#1 Medium-Term Rentals Contributor
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Just being more conservative in our underwriting. The numbers have to work. We don't buy assuming rates are going to come back down. If the deal doesn't cash flow at current rates, we don't buy.
Quote from @Michael Bennett:
I think it makes a lot of sense for investors to hold a real estate license. I saved $24,000 in commission last summer when we sold a duplex, and am set to make $17,000 in commission on a property we will close on later this week. That $17k is going straight to a 3 point permanent rate buy down putting us in the mid 5s.
This works for some but not for all, the expertise my agent has on the Denver market saves me time and money. Worth every penny and I wouldn't do it any other way. That being said I also have no interest in doing the agent side of it. If I did I might have a different take.
Quote from @Michael Bennett:
I think it makes a lot of sense for investors to hold a real estate license. I saved $24,000 in commission last summer when we sold a duplex, and am set to make $17,000 in commission on a property we will close on later this week. That $17k is going straight to a 3 point permanent rate buy down putting us in the mid 5s.
This works for some but not for all, the expertise my agent has on the Denver market saves me time and money. Worth every penny and I wouldn't do it any other way. That being said I also have no interest in doing the agent side of it. If I did I might have a different take.
I think with changing rates and an unclear trajectory the key is to be safe. The one change I have made is that I won't touch anything that doesn't cash flow at LTR rates. Even if the plan is MTR or STR, then it needs to break even at LTR rates.. nice to have the security blanket of LTR rates covering expenses in case of worse case scenarios.
Quote from @Ran Iarovich:
With recent issues with the debt ceiling and summer market coming up. We've been through many fluctuations since the start of 2022. To the Bigger Pocket community - are you doing anything different this year due to the recent rate hikes?
Hello, my name is Robert Kurka, I possess exceptional skills in analyzing deals and identifying lucrative projects, setting me apart from others in the field. One of my key strengths lies in my ability to find cash-flowing rentals by employing innovative strategies involving Short-Term Rentals (STRs) and Medium-Term Rentals (MTRs). These approaches prove particularly effective in overcoming challenges posed by high-interest rates.
Without implementing short-term and long-term rentals is very hard to cash flow right now.