With interest rates raising at their fastest pace in years, many investors, syndicators and developers have been caught off guard, particularly those with variable rate or bridge financing. Ken breaks down what could happen next as we begin to see the impact of changing economic circumstances.
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⏰ Timestamps ⏰:
0:00 Introduction
0:16 The rapid increase in interest rates
0:56 The impact of increased rates
1:47 How real estate deals have been presented the last few years
3:53 Example deals and how raising rates impact them
5:32 Four scenarios where investors may be at risk
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ABOUT KEN:
Ken is the author of the bestselling books The ABC’s of Real Estate Investing, The Advanced Guide to Real Estate Investing, The ABC’s of Property Management, and has an upcoming book: “ABCs of Buying Rental Property: How You Can Achieve Financial Freedom in Five Years.” Ken is a Rich Dad Advisor.
With over two decades of experience in real estate investing, Ken McElroy is passionate about sharing the good life by helping real estate investors grow and prosper. This channel is a place for Ken to discuss numerous topics connected to real estate investing, including finance, budgeting, the entrepreneur mindset, and creating passive income.
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dropping GEMS
I’m 20 and I inherited 3 houses, I’m a lucky guy, they all cashlfow around 2500$ each how should I scale this and get more houses?
And the rate is even higher today. Problem I see are adjustable rate purchases and those who need to refi to get out. Those people are screwed, especially if they didn't buy it right.
we're going to have a currency crisis
in my opinion if you buy a good deal and your at a 10 cap and you lock in a 10 year interest only loan your great
Fkin hate real estate investors they a pure trash imo and ruin the community, anyone who had a dream of even owning a house their dreams are ruined because all the rich are allowed to get better deals and do more with just money alone, makes people hopeless and it's absolutely preditory and fked up, everyone should only be allowed to own 2 house no matter what, it's some B's that people are allowed to do this absolutely wrong
So True!! Thanks Ken!! ????
I appreciate your approach to teaching, to my understanding this just proves how much we need an edge as investors because playing the market like everyone else just isn't good enough. I was quite unsure about investing in this current market and at the same time I felt like it's the best time to get started. on the market.
Those already holding properties, payments remain the same.
Estoy completamente de acuerdo con su evaluación de esta situación. Son varios los factores que intervienen y hemos llegado a un punto de no retorno. El sector inmobiliario se hunde La inflación está acabando con la esencia de nuestro país. La comida es cada vez más escasa y más cara. El combustible pronto se convertirá en una elección sobre la necesidad debido al precio. Los empleos se están perdiendo en número récord. Y la amenaza de otra Guerra Mundial asoma como un peligro claro y presente. Tenemos un presidente que hace a un lado todo esto y continúa pensando que todo es arcoíris y sol. Este colapso reducirá la manada y durará mucho, mucho tiempo.
I completely agree with your assessment of this situation. There are several factors involves and we have come to a point of no return. Real estate is diving Inflation is destroying the essence of our country. Food is becoming rare and more expensive. Fuel will soon become a choice over necessity because of the price. Jobs are being lost in record number. And the threat of another World War looms as a clear and present danger. We have a President who sweeps all this aside and continues to think all is rainbows and sunshine. This collapse will thin out the herd and last for a long long time
1:45 was a good part. I like his editing keeps me watching honestly.
Rising interest rates. Your rates are way lower than what we have here in our Country.
One thing you didn't mention is that if the economy tanks, and many of your tenants no longer can afford the rent, you are in even bigger trouble. Now, if you bought the property at very low rate and your cash flow is very high, you may be able to ride the storm, if you are a cash buyer, you can certainly have some room for negotiation with your tenants, but if you're in the situation you mentioned (High risk investor) and your tenants cannot afford paying the rent… good luck.
Real estate brokers next. You should see how they are offloading their ill-gotten properties.
Canada. A very scary story. Trees will run out to hang themselves.
Fear monger wants to make $ from views
So, this is NOT a good time to invest in Fundrise?
Investors of clever people who adapt and change it with the market. That's where the word creative financing is use the most, where there's a will there's a way. The people who cannot afford houses have been around for a while, anything and everything tips people over the edge when there is little amounts money to begin.
Investors are equally responsible with the Fed for creating the bubble. Glad to see them go down.