Interest rates on 30 year mortgages have dropped .75% to 1.00% in the last week!!  NOW is the time to buy.  These are historical low rates.   Based on our experience, rents generally lag anywhere from 9 - 18 months behind rates, so invest now to lock in these great rates and lock in your cash flow.  Often, single family rental rates never adjust downward to reflect the reduced interest rates.  Single family rental rates have generally moved up in good times and just stayed flat during bad times.  Interestingly, we are seeing rents increase because so many people are unable to buy so demand for these properties has increased.

Think of it as a lever.  More cash investment up front equals more cash flow.  It is really as simple as that.  Everyone WANTS no cash investment and lots of cash flow.  Sorry….   That’s why KKR and alot of the Merger & Acquisition deals of the late 80s failed.  They overpaid for a company and saddled it with too much debt AND at too high an interest rate.  The whole thing is bound to fail.  Same thing goes for real estate.  Don’t plan on putting no money down AND not having a cash cushion.   Anyone who “sells” you anything else is giving very bad advice.  If you put 50% down on a real estate investment, then you don’t need a cash cushion because your Principal and Interest payment are low relative to your net operating rental cash flow.  If you put nothing down, more than likely, you have negative cash flow which can normally be more than offset by your income tax savings.   Sound complicated?  it is, and isn’t.  Just talk to a knowledgable and experienced professional like an accountant and they can explain how all this ties together.

Ouch…..   alot of upward pressure on rates due to runaway fuel prices AND resulting inflation.   How long until the Fed raises its rates to battle inflation??

http://www.msnbc.msn.com/id/7148582/

The investor loan market is in a state of upheaval.   Regulations are changed daily and who knows where it will all end up..   Currently, no one seems to want to do second mortgages on Investment Loans - the banks got real beat up on these and had to take massive write-downs.   FNMA / Freddie Mac used to allow a total of 4 loans, then increased it to 10 and have recently changed it back to 4.  You can still get private mortgage insurance on an Investment Loans (although most of these companies will not insure Investment Loans), so that means FNMA / Freddie Mac can still do 90% Loan-To-Value.  The pendulum has swung back very far - we will see some relaxing of these restrictions - the question is when??