Cash-flow expectation as interest rates increase

[Charles H.]

Hello BP,

wanted to have your insight when you guys run your numbers and also how you adapt as interest rates are on the rise.

I tend to follow @Brandon Turner numbers (100$/month/door & 12%CoC for apartments). And a DCRS of at minimum 1.3 (bank loan requirement).

- Do you guys follow the same requirements?

- Do you lower your CoC and monthly CF as interest rates increase or do you look for a better deal?

Most of the local banks offers me a 20 years/6%ARM (not a fan of ARM...) so it makes it tight to reach my expectations. And in addition, sellers know there is demand for MF so they jack up their selling price and i usually end up with a, what it seems to be, a low ball offer all the time.

Thanks for sharing your thoughts. 

To our success.

CH