Interest Rate Predictions

[Dillon Cook]

Hey everyone,

I'm asking around for opinions, observations, and predictions as we see an upcoming interest rate hike already affecting investors. Two months ago I saw loans as low as 3.2% interest rates on residential investment. Now we are at 4%. The value add investors can barely make deals work right now, but what about the people looking for rent-ready or turnkey LTR?  From my daily analysis, I don't see those even breaking even. Cash flow is typically negative $100-300/mo after reserves and PM fees, etc.  Keep in mind, I am referring specifically to central FL market, but I realize this applies to every market to some extent.

How do you see this year playing out? Prices drop or increase further?  Inflation pushing housing up? Fed was able to raise rates a handful of times before they had to halt and eventually reverse 4 years ago. Will they even be able to raise rates again this year?

Am I too focused on interest rates here?

  

[Joshua Janus]

In Columbus, Ohio there are still positive cash flow turnkey LTR's in B-  to C class areas on the market with some breaking the one percent rule. In B or any A class areas, that won't happen especially with the interest rates rising. The B class properties that cash flow positive are flooded with offers and the best bet is to find an off market source to get one that way without overpaying. We need the rents to catch up to the rapid appreciation that is happening here which will be a while.