Cash Flow Cliff Notes

Timing Is Everything!

re you aware that understanding the preferences between homeowners and renters can open doors to amazing opportunities in the real estate market? Let’s explore this fascinating topic together.

As I write this I’m standing in front of the prestigious Federal Reserve Bank of Atlanta, where decisions about interest rates are made. These rates have a significant impact on the housing market. And right now, interest rates are on the rise, causing a stir among people. But here’s the exciting part – it’s your chance to shine!

Those who sold their homes recently to take advantage of high prices are now transitioning to become renters. They’re avoiding high-interest rate mortgages and patiently waiting for rates to drop before making new purchases. And guess what? You can benefit tremendously from this situation!

By going against the crowd, you can seize the opportunity. When interest rates are high, it’s the perfect time for you to buy because there will be a surge in available tenants for your properties plus your competition is in a holding pattern. Sure, you may temporarily sacrifice some cash flow, but remember, interest rates are ever-changing. When rates eventually decrease, you can refinance and skyrocket your cash flow once again.

Keep in mind that the purchase price of a property is fixed once you buy it. As interest rates rise, property values typically decline, making more people opt for renting. Conversely, when interest rates drop (like in 2021 or 2020), tenants aspire to become homeowners, leading to increased property prices. That’s when you may consider selling, especially if you haven’t factored in sufficient cash flow

Notice the theme? Do the opposite of what your neighbors are doing. It always amazes us how people think by mimicking the behavior of the poor they will become rich.

So, my friend, embrace this invaluable knowledge about homeowners and tenants. By taking an unconventional approach, you can tap into incredible opportunities and thrive in the ever-changing real estate market.

Wishing you prosperity in all your real estate ventures,

Mike Marino, The Cash Flow Guys