Interest Rates & Real Estate Investing: How to Find Deals in a Higher-Rate Market

Interest Rates Day!

My thoughts:

Investors know why the fed is in the feeds and news today, and will be paying attention to see what happens with rates. If rates stay higher, or move higher—it probably means another year where the numbers have to make sense from Day 1. (No speculating!)

Longer term, though, I still think there’s opportunity. Good properties will still produce income, loans will get paid down, rents can grow and financing conditions will eventually change. (It’s cyclical)

Just know:

If you can make the numbers work today, it should hold really well for the medium to longer term.

How do you do that? 

1. Force equity- buy a property that needs some help. (new roof, paint, new flooring, etc..) — think of it like a stock that you can purchase and personally shine yourself to make more valuable. —- I’ve said that dorky line so many times lol— but it’s true.

2. Look for financial trouble. (investment wise) — this means finding landlords who charge too low of rent and don’t care to raise rents and would rather sell, have too much to fix and don’t want to, or moved away and don’t care to come back and deal with it. Trust me: When they paid $8 for the property 50 years ago, it becomes a lot more possible & likely option for them to sell happily in these conditions. (Win-win)

3. Make workable offers! —- we have entered a place in the market where an 80% 70% 60% offer will not get the same response it would’ve gotten a year ago —- or especially three years ago.— it’s time to start trying your luck, but have a reason.

My biggest thought for investors right now: Don’t buy a property because you think rates are coming down. Buy it because it works if they don’t. Calculate your number, and offer.

Protect yourself & Keep going!

Shane