Investment property interest rates

[Luis Vaca]

Fellow noob here, I am in the process of signing documents for my first SFH property in Kansas city. When doing my analysis i was doing it with 5.0 interest rate. Currently it is at 5.7% for me.

It is still a decent deal but it drops down my CoCR to just above 9%, monthly cashflow now down to about 150$.

Question is do rates drop to 5% or below usually in the kansas city area for investment properties? This way i can just refinance later.

Thanks for any info

[Mike D'Arrigo]

Originally posted by @Luis Vaca:

Fellow noob here, I am in the process of signing documents for my first SFH property in Kansas city. When doing my analysis i was doing it with 5.0 interest rate. Currently it is at 5.7% for me.

It is still a decent deal but it drops down my CoCR to just above 9%, monthly cashflow now down to about 150$.

Question is do rates drop to 5% or below usually in the kansas city area for investment properties? This way i can just refinance later.

Thanks for any info

Luis, I'm not sure what you mean by your question. Rates don't drop by geographic region. Rates have dropped significantly in the last few weeks. In fact, they had the largest single week drop in a decade just recently. There's no predicting what they will do in the future but as long as inflation stays in check, which the Feds expect it to do, rates should remain stable. Ask your lender what your rate is at par (no points) and with 1 point. Some lenders have had some really good pricing recently and 1 point could buy your interest rate down and much as a 1/2 percent. You should talk to your lender. Keep in mind that CoC is only one component of real estate returns and your total returns are much higher. Here's a blog I wrote a blog for BP on this topic.

https://www.biggerpockets.com/member-blogs/3992/83758-is-it-still-a-good-time-to-invest-in-real-estate