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Investing & Financing: Real-estate/Interest Rates.

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      CommentAuthorJason G
    • CommentTimeMar 29th 2006 edited
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    The market in Florida is on a plunge and interests rates are on the rise.

    This means two wonderful things.

    1.) I shall be purchasing property from some wise person who decided to buy a 500,000 Commercial lot at the peak of the real-estate market. While they are trying to control a variable interest rate and can't afford to deliver payments due to interest rate hikes.
    I shall have to take over payments.

    2.) Once the interest rates start going up, so does my T-BILSS I'm so excited

    PASSIVE INCOME BABY!:)

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      CommentAuthorKMulligan
    • CommentTimeMar 30th 2006 edited
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    Err.. confused here. You are taking over payments, why wouldn't higher interest rates effect you as well?

    My Personal Finance Blog
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      CommentAuthorjdoc
    • CommentTimeMar 30th 2006 edited
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    Better yet, let them go bankrupt and pick up the property on foreclosure at a much cheaper price. If you can lock in a long term interest rate now (rates are still pretty low historically speaking and the yield curve is extremely flat at the moment), then you've got the best of both worlds in terms of price and interest rates.

    Investoid - Finance and Investing in Perspective
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      CommentAuthorKMulligan
    • CommentTimeMar 30th 2006 edited
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    jdoc you risk the hounds that a foreclosure brings with it... there are a lot of people out there now seeking just foreclosure property and snatching them up... of course if you can do it, you are correct :)

    My Personal Finance Blog
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      CommentAuthorTravis
    • CommentTimeMar 30th 2006 edited
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    I've been in the presence of those "hounds" a few times and it's unbelievable how rabid they can get if they really want a property. I swear, they were in fact foaming at the mouth.

    It's obviously much less riskier to jump on the property before they foreclose it, and if they're in a desperate situtation to get out, much like you've described, it's a rare and ideal situation for you to buy the property and take advantage of their financial dispair.

    Proud Partner of YGG
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      CommentAuthorjdoc
    • CommentTimeMar 30th 2006 edited
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    [quote="KMulligan"]jdoc you risk the hounds that a foreclosure brings with it... there are a lot of people out there now seeking just foreclosure property and snatching them up... of course if you can do it, you are correct :)[/quote]

    Fair enough - I guess I envision getting into properties once the market is falling so much that investors are too scared to get in and most people are trying to hang onto what they have. That happened in Alberta in the 80s/90s (when oil fell to $10). No hounds were around - everyone was trying to get out and you could make a killing.

    Side comment/question: What's happening in Florida is really just the tip of the iceburg - there are several other major centres in the US with the same economic dynamics. The question is will it affect US consumer purchasing? If not, where will they get their money? The last recovery (2003-5) was because they could refinance their homes and use the cash to buy buy buy.

    Investoid - Finance and Investing in Perspective

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