![]() People often get the two concepts confused, he said. The latter means properties would be worth less in a month than they are today, that's not happening, he noted. The former means home values are increasing but not as rapidly as in the last two years. ![]() He describes the current real estate market trend as decelerating rather than depreciating. In the meantime, he's compensating by increasing rents by about 7% to 8% on the new units. They plan to keep and rent all the properties.Įventually, when interest rates come back down, Primm's strategy is to refinance the loans. Primm and his business partner have already purchased 52 single-family homes and one 19-unit apartment building complex this year, according to closing documents viewed by Insider. He's part of a national real estate investing group called The Collective Genius which meets quarterly and discusses the real estate market. He draws this conclusion from his personal experience and interaction with other investors nationwide. While reduced buying power has led to a drop in demand, the market has remained strong, he said. "And if rates go down, which eventually they will, you can always refinance." "I would tell people to just get what they can now and make sure the property still cash flows positively because if rates go up, you got your rate locked in for probably at least three years," Primm said. This means lenders are raising the rates to make their mortgages more attractive to investors. Inflation erodes the returns investors reap from bonds, including mortgage-backed securities (MBS). However, the Fed's fund rate impacts short-term consumer loans like credit cards and car loans rather than mortgages.īuyers who will need a conventional mortgage should pay attention to elevated inflation, which is harder to predict. Some home buyers and investors may be looking to the Federal Reserve to gauge when there might be a signal of relief. While commercial interest rates are directly impacted by the central bank's rate hikes, mortgages are not. This year that rate is anywhere between 5.5% to 6%. Last year, the interest rate on commercial loans he secured for his properties was about 4.5%, he tells Insider. He has felt the impact of inflation and interest rate hikes on his business. He interacts with the real estate market in four main ways, as a wholesaler, flipper, landlord, and educator. ![]() Primm and his business partner have been investing in real estate since 2014. "They have a monthly budget for what they make, how much they bring home, and how much they can afford to pay for housing, whether they're renting or buying a house." "People usually buy properties based on what they can afford monthly," said Sam Primm, a real estate investor. While it's a small percentage move, the outcome could translate to a few hundred dollars a month going to interest payments rather than the principal owed. Today that rate has increased to over 5%, according to more recent reports. ![]() #House flipper free download full version mac macAround this same time last year, the average 30-year fixed mortgage rate still well uner 3%, Freddie Mac historical data shows. Now, as the economy reopens and begins to recover, mortgage rates have been fluctuating quite a bit. First, nationwide lockdowns led to a spike in demand for suburban homes due to the need for more interior space for a home office and a preference for more outside space when social distancing. Home buyers haven't been able to catch a break in the last few years. Prices on distressed properties haven't gone up, but supplies and materials have.For him it's about time in the market rather than trying to time the market.Sam Primm is still buying real estate this year, regardless of interest rate hikes. ![]()
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