All Forum Posts by: Ross Kalmbach

Once again I'll have to reinforce that although interest rates have an effect on the cost of debt - the cost of debt is not in the cap rate calculation.  If you pay 3% or 12% for the debt it does not mater. The amount of debt via the purchase price is what is used in the calculation.  While there is a "correlation between the two variables [that] is not a perfect 1.0, but rather a more moderate 0.7." one should not make the assumption the two drive each other.

There is a good article here: Real estate: The impact of rising interest rates

In summary it comes to the conclusion: 

"More importantly, historical data show that changes in Treasury yields do not necessarily result in changes in cap rates. Even assuming lags between interest rate and cap rate changes, analysis found no statistically significant relationship between the two variables.

These findings confirm that cap rates are influenced by a wider network of variables beyond interest rates, including real estate fundamentals, capital flows and investor risk appetite."

Hope that helps.

My stepdad might be able to for a small fee. He does it for my properties.

Hey everyone - not sure about lunch but I know about this one in Addison: https://www.biggerpockets.com/forums/521/topics/63...

Also I believe there is one every second Wed of each month in second Euless. Since I am new to the DFW area I googled and it's near the airport :) 

Anyone others that I don't know about? Will try to attend both if I have time.

Market is getting pretty high in those areas though. Tred carefully.

Has anyone had experience with Freddie Mac's Targeted Affordable Housing (TAH ) program?  I actually know several abandoned hotels in an area that for the right price and some renovations could be made into affordable housing.  I need to do some more research as well to see if they would finance the renovation cost in the loan. I doubt it would make anyone rich - but it would help the community - in-turn helping property values and the economy of the entire county.  On top of that - I'm guessing if you talked with the city/county about doing such project they would easily give you the permits/zoning required - and maybe tax incentives.  

Any thoughts/suggestions would be greatly appreciated! Thanks!

I think this is more of a math problem.  Interest rates are not in any part of the cap rate equation. While there might be some correlation between the two - it would be unwise to assume any causation. 

I actually got that inscribed on my iPad when I got it - "An investment in knowledge pays the best interest."  Best for me was actually finishing college - I almost didn't.  But it led to an internship that led to a job where I am still at with a great company.  Lets me do real estate investing on the side.  

Sounds like a plan

@Hilary Stalder You can always get it under contract pending an engineer report and quotes from foundation repair companies - just think of it as a more expensive extra inspection.  I purchased a house that was leaning slightly sideways. The seller even agreed to pay for the engineers report.  Bad news is it was wrong and I still had to fork over $12,000 as it ended up dropping another 1.5 in on one side.  Also, since the engineer report was in the benefit of the seller and not me I had no recourse vs them (nice to know for future reference).  So be careful with foundation repairs as all others have mentioned.  It might cost a few $100 extra but well worth the cost to know how extensive the repairs might be.  Good news I still got it at a nice discount and didn't lose money (although I didn't make any either).  I would do it again now that I have one under my belt.

I'm sorry if I'm late but are you talking about 1.5% ?