All Forum Posts by: Tom Stern

I had a post up a few months ago (can't find it now) where I described my situation with four fully paid-for rental properties. My next move is to sell one of them and buy a multi-family. I ran the numbers, came up with a budget that works, was able to find a lender that would give me a loan, and so on. Right now, I know the general area where I want to buy and know what type of deals I am after, and they seem to be out there, not super often, but often enough.

And then I began thinking... Perhaps this is a challenging time to take a loan against the house because the interest rate is high (above 8%), and even though the rental income will be higher than the loan payment with some margin, it does seem like there is more uncertainty in the near future than before. I am wondering what everyone thinks will happen, if at all, with the housing market and/or interest rates? I know no one knows, and everything is possible, but I do wonder what other people think, and perhaps someone has some reasoning I can relate to. I keep hearing the rates will go up as high as needed and get reminded from time to time about the close to 20% rates in the 80's. However, I don't see the Fed being that aggressive this time around.

The other question is... let's say that eventually the interest rate will drop, which I imagine would allow more people to sell properties, and perhaps prices will fall, at least to some degree. Other than possibly missing out on this opportunity, how might something like this affect my 30-year loan for the multi-family property, if at all?