High interest rates are a concern for many investors discouraging some from taking action.
Throughout my long career working with real estate investors, I have learned two important foundational aspects of investing:
First, investors often focus on a single aspect of an investment, assuming it is the sole factor determining the success or quality of the opportunity.
Let me give you an example:
Current Interest Rates ~ Interest rates are around 7.25% with 30% down. What if I told you that you could get 6.375% or even 6.25% on an investment property today?
This might sound attractive, BUT it depends on the overall scenario. To achieve a 6.375% rate, you would need to pay three points, which equals $6,300 on a $210,000 mortgage. This would add up to $105 a month if you spread the cost over 5 years.
➡️ It’s essential to analyze the big picture rather than focusing on just one aspect. Understanding all parameters and alternatives helps in making more informed investment decisions.
