Finding deals that justify pulling from HYSA

[Eric W.]

I’ve been searching in the Sherman/abilene areas for potentially starting out. These areas seem affordable compared to where I live in dfw. I would be looking for something in the 200k range and have anywhere from 100-130k for a down payment. 

My issue that I’m having trouble getting over is that down payment money is currently yielding 5.5% in an HYSA with no risk or stress. If I pulled to put on a rental property for around 200k then after property tax, property management, mortgage, insurance I’d probably be cash flowing much less than my 5.5% at the moment. 

Would this be a bad idea to pull from the HYSA to enter real estate investing right now? Would it be better to just wait for rate cuts then jump in. 

[Eric W.]

Quote from @Jonathan Bock:

@Eric W.

What's your expectation/thesis for HYSA rates in several years? 

I think it’s hard to say. The consensus is lower than they are now, but anything could happen. Inflation could spike again we live through another Arthur burns era. Maybe rates go even higher from here. 

I get that monthly cash flow on the investment property isn’t the only factor and that real estate always goes up and now a days - going forward will probably just go up in a vertical line indefinitely, but if I don’t intend to sell the property due to tax purposes I wouldn’t be capturing the price appreciation, it would be the cash flow. 

idk, I’m probably overthinking this lol. Just most of the people I know in real estate investing got started when rates and housing prices were all much lower. They’ve secured low rates and rapid equity increases due to the last few years of Fed/gov intervention.