Investing with these interest rates?

[Cara Ledman]

Hi guys, 

I'm just wondering how your investing and buying strategies have changed with the increase of interest rates. What constitutes a good deal to you now that interest rates are higher? 

[Benjamin Aaker]

Hi Cara,

A good deal is still one with good metrics. Investors should not change their criteria due to interest rate fluctuations. At the risk of oversimplifying, you still need to have a certain cash on cash return, so your purchase price will need to decrease as the rates increase. Sellers haven't quite realized this yet and are living in the rosy rate climate of 18 months ago. A percentage of them will have to sell for a variety of reasons and will be willing to sell for a price that meets the investor's criteria. These will be the good deals now. The investor needs to conserve liquid cash for that time.