All Forum Posts by: Cesar S.
Cesar S. has started 9 posts and replied 65 times.
Post: Mortgage rates skyrocketing !
- Investor
- Jersey City, NJ
- Posts 67
- Votes 4
Originally posted by @Peter Tverdov:
Originally posted by @Russell Brazil:
Originally posted by @Peter Tverdov:
Originally posted by @Russell Brazil:
Originally posted by @Peter Tverdov:
Originally posted by @Russell Brazil:
Originally posted by @Josh Huber:
@Russell Brazil - Your post above stating that investors should load up on properties while interest rates are still low got my brain turning.
As interest rates rise, which do you think is more likely to happen; increased rents or decreased property values?
If all other variables remain equal (cost to purchase a property, tax, insurance, etc...) as interest rates continue to rise, profit margins for new purchases should continue to shrink. So wouldn't something have give somewhere? Otherwise there won't be enough ROI to motivate buyers to purchase properties.
In my opinion, I can see property prices decrease as interest rates continue to increase. If that's the case, then wouldn't it be better to load up when interest rates are high, then refinance when they go back down?
P.S. - I'm new to the REI world, so please don't take any part of this message negatively. I'm simply looking for your opinion/knowledge.
Numerous studies, including those by Nobel laureate Robert Shiller have shown that movements in interest rates have no impact on residential real estate. For most of the general public, this seems counter intuitive...but for loan officers and real estate agents it makes perfect sense. When a buyer goes into the market place, and they are preapproved for say a $400k house...they will buy a $400k house. If rates increase and now they can only afford a $350k house,....that original property they wanted at $400k, the price of that does not drop...but instead the buyer moves down to a cheaper property to coincide with their purchasing power. So as rates go up or down, the buyers simply move up or down in price range with the rates while the property values remain unaffected by rates.
I completely disagree with this. Rates have gone up 75 bps since January and the town I was looking to move to (putting it off 2 years) has sent me nothing but alerts of prices being slashed. Prices on million dollar homes all the way to homes in the 500s. Interest rates up equals housing prices down. It's supply and demand.
Post hoc ergo propter hoc
I guess what I am seeing is magic then.
By your same logic, then prices rising in my market (as well as rising prices across the nation) should be attributable to rising interest rates?
I don't know where your market is. I live in one of the hottest real estate markets in the country, an area that is nearly recession proof. When rents and real estate prices start tightening up on the coasts, it's a sign for the rest of the country. I have seen prices cool in multiple markets as well as landlords slash rents.
Post: How Much Should I Sell This Property For?
- Investor
- Jersey City, NJ
- Posts 67
- Votes 4
Eyeballing the deal it is not cash flowing so appreciation is the only play. Im not familiar with the area but its not north NJ so hard to tell without looking at the inside and amenities etc. You're looking to sell I'm assuming ? I invest in condos but usually in Hudson county.
Post: House hacking and cosign with family member
- Investor
- Jersey City, NJ
- Posts 67
- Votes 4
Well that's true but he's putting in the funds and will be living there while down payment is low :)
Post: House hacking and cosign with family member
- Investor
- Jersey City, NJ
- Posts 67
- Votes 4
Apologies it's a two family home not multi family he's looking to buy
Post: House hacking and cosign with family member
- Investor
- Jersey City, NJ
- Posts 67
- Votes 4
Hello BP, I have a question on house hacking. I have a family member, who's single and looking to buy a multi family property (his credit is 670 but mine is better 790). He has the down payment and closing costs money but may need help depending on property price. Also, I would need to help him choose the property and run the numbers since he's a newbie. My question is can I help him by being a cosigner for this loan while he's the primary owner occupant and will he still be able to only put 5% down? I would be on the deed as well and we would also split any rental income 50/50 since I'm cosigning. I want do to things the right way and make sure I'm following the rules hence my question. Thanks!
Post: Options to use equity on current rental
- Investor
- Jersey City, NJ
- Posts 67
- Votes 4
Have you thought about taking a line of credit? It will take away some of your cash flow but allow you to use the equity if you decide to keep it. I know Penn Fed does them up to 80% LTV on rentals with no closing costs and just a drive by appraisal. They do interest only loans for 12 yrs with balloon payments. Or you can try td bank or Wells Fargo as well but they may require appraisals. Good luck!
Post: Should I purchase a rate lock?
- Investor
- Jersey City, NJ
- Posts 67
- Votes 4
I wouldn't , especially not at that price. Rates will fluctuate but fed didn't raise rates last time they met and they're not meeting until June I believe. The 10 yr treasury yield which most closely tracks 15 yr mortgage rates and 30 yr increases has moved up a bit but I still think the odds are more in your favor that there won't be a HUGE move by May 30th. Obviously I can't predict the future so good luck to you!
Post: Do you include principal paydown in return?
- Investor
- Jersey City, NJ
- Posts 67
- Votes 4
I feel it should be taken into account since it's a part of the return and for the most part you're not paying it the tenant is
Post: Where would you invest if you were in my situation (Live by Nyc)
- Investor
- Jersey City, NJ
- Posts 67
- Votes 4
Have you looked at Hudson county? I know Jersey City is getting pricey but there are still some good deals in Bergen Lafayette that I've been unable to get. I have a couple of properties in the heights and downtown , tons of appreciation happening there . Since it sounds like you want cash flowing properties your best bet is out of state (Midwest) or even PA. Good luck!
Post: Bed Bugs in a Multi-Family
- Investor
- Jersey City, NJ
- Posts 67
- Votes 4
I had this issue with one of my units a couple of years ago. It was a condo so the association ended up doing all six units in the building. Now they don't travel far but they can hide for up to a year but so far so good. We used a company that was local and also had dogs to sniff around a few months after it was treated. Bedbugs are harmless but just hard to get rid of although in my case I haven't heard my tenant complain about it in almost two years. Hope this helps !