Current investment interest rate

[Alice Huang]

Hello fellow BPer!

Hope y’all keeping well during this interesting times.

Been looking for properties in Texas with my business partner, another BP member, and we are struggling with our cashflow due to the high interest rates.

Would love some insight and guidance!

Situation and our plan:

- am Canadian so been very difficult to get funding as a Canadian, so properties will be funded under my partner's personal name and then transfer to our LLC

- we will be BRRRR SFH and most properties do not cashflow well at 5.25-5.50% investor rate

Would love to know what your investor rates are and if we could do better, and how to do better with our rates.

Really want to get into the market soon.

Thanks everyone in advance.

Sincerely,

Alice in Montréal

[Jaysen Medhurst]

@Alice Huang, I'm seeing rates in the mid 4s on commercial mortgages. If 100 bps is killing your deal...you don't really have a deal. 

Are you focusing on Austin? That's a hot and very expensive market, no way you're going to be able to cash flow a SFR. Probably wouldn't be able to cash flow a small MFR either. The price-to-rent ration is just too far out of whack.

What are the numbers on a typical deal you're considering? As a rule of thumb, I've found that SFRs don't cash flow well (if at all) once the ARV gets above ~$130k or so. This is especially true in a place like TX with relatively high property taxes.