Deal or no deal….at least right now?

[Bianca Rodrigues]

Hi All!

Has anyone recently purchased a multifamily property? What steps are you taking during the underwriting process to make sure you’re conservatively projecting expenses and income, especially with rates pushing higher and talks of home prices decreasing.

Is now a good time to buy, or would you recommend waiting for a few more months to see if home prices come down even further.

Thanks!

[Dave Donahue]

I think now is still a great time to buy.  Prices may come down a bit but the FED has already stated that the prime rate will increase another .75 - 1.25% before the end of 2023 and likely .50% in 2024.   In 2025 the "experts" are "expecting" the prime rate to drop again.  This all said... As rates increase, yes prices may fall a little over the next 6-9 months but you may end up with a higher rate as a result of waiting.  My two cents is to buy now if the numbers are right for you and refinance in a few years when it makes sense to do so.  While underwriting I tend to forecast my expenses high and my income low along with .5% higher on the interest rate than I am quoted.  This is very conservative but if my numbers still shake out after that underwriting process then my risks are almost always covered.