Strategies for high Interest Rates?? REFI? Numbers don't add UP!

[Jacob Sloop]

Hi All,

-Looking for advice and to start a conversation with you experienced operators on here about strategy moving forward around these high rates! Including refinances...yikes

-Seeing that multifamily projects usually revolve around a short timeline, 5/10 years how is that affecting your underwriting and confidence moving forward?

- AND how about anyone that is facing a refinance currently??  I'm sure that people didn't project into their numbers a 9% interest rate refinance 5 years ago..  maybe some did but the line between being conservative and actually using a reasonable margin is a thin line sometimes

This is a daunting prospect, especially with other peoples money involved in a project..

-Now surely this cycle will ride itself out over the longer term but for those looking to acquire property in the now and plan on a value add component,  its almost gambling on the future refinance...not the position most are comfortable being in with millions of dollars involved.

I have been running properties through the syndicated deal analyzer and other DSCR spreadsheets only to find inadequate COC, cash flow, AAR, you name it! Even with my "lowball" offer plugged in.

What are others thought? Experiences?

[Chris Seveney]

@Jacob Sloop

I was speaking with a large MF operator (2B+) and they noted MF market transactions are dead right now. Pencils are down in new projects and there are no transactions going on until a clearer picture on interest rates and cap rates adjust due to the rate environment.