All Forum Posts by: Brandon T.

Well, there's no way to know for sure. It's virtually inconceivable rates will go anywhere near the 15-18% they hit in the early 80's since it would destroy the economy (housing is a much bigger part of the economy than it was 40 years ago). On my first mortgage I paid almost 9%. That was in the early 1990s. I could theoretically see mortgage rates getting back as high as 6-7% before there started to be some real serious pain. 

As for rates and housing prices, yes it will definitely affect it. Even with low supply, high rates can destroy demand, which would just bring supply & demand back into equilibrium or swing the pendulum the other way. It's not as if home buyers have no other options - they can rent, cohabitate, live with parents, or not move from their current home. There may just end up being more of that. 

Most people can't buy a home for cash, so lending requirements are always going to be a huge factor in home prices for the masses (I'm excluding super-rich stuff). If a minimum down payment is 10%, and interest rates climb by a couple of percent, the maximum loan an individual qualifies for will be reduced, so they would have to make up the difference in cash, something most home buyers lack. Say a person qualifies for a $200k home based on their income, and they have to put down $20k and mortgage $180k. If rates climb by 2%, their maximum qualification is going to fall to perhaps borrowing $150k, so they would need $50k to buy that same $200k home (25% down). They'll either be pushed into a lower purchasing pool or out of the market altogether. This has happened to several of my tenants who were hoping to become homeowners. The home price increases have happened so rapidly that they can't make up the difference to get qualified. If rates go up and prices come down, they're still in the same boat. 

@Brandon T.

I'm a broker and property manager in the Daytona Beach area and there's definitely some deals in that price range here but they typically require some work. If you're going the FHA route you may want to explore the 203k repair loan program they have. You'll want a lender with experience in this type of loan as I understand it can be a little tricky but if you're willing to put in the work then the payoff could be worth it for you in the equity you'll have after you finish your repairs and get the other side rented out. Best of luck!

Hey @Brandon T.,

you are definitely on the right track. House Hacking is one of the most powerful strategies for gaining property management experience, acquisition, etc.  

Finding a property in a B-class neighborhood at 140k is almost impossible but a C-class neighborhood you can find that needs a lot of work

An FHA loan is really strict when it comes to buying a home that needs TLC so, I recommend getting a conventional loan at 3%- 5%. There is more lead way going the conventional route.

Best of luck!

Hey @Brandon T.,

You're right, it is super competitive. I am searching for a FL duplex as well.

I'd recommend connecting with @Steven Torres who covers Central FL and just helped another BP member put a duplex under contract yesterday.

I agree with @Tyler Gibson. I am in Palm Beach County, and you cannot get a duplex for that price point. I am looking for a client now and 400k is the lowest I have seen. 

If you want to try to buy a fixer, I suggest using an FHA 203k loan. This is a renovation loan where the property doesn't even need to be habitable at the time of purchase. With an FHA 203k loan you can borrow up to 110% of the after repair value. This would require three and a half percent down but it would fund the renovations of the property. This kind of deal is not simple and not for the faint of heart so consider it with a grain of salt.