LISTEN TO THE FULL EPISODE HERE:
https://open.spotify.com/episode/1ozz9CIvtGswqtEwa9oamG?si=bca1a942db514384
The Federal Reserve’s decision to raise interest rates has sent ripples across the real estate and investment landscape. In this podcast episode, Quinton Harris, VP of Northeast Florida Banking of England, unravels the repercussions of this crucial financial move.
The 11th consecutive interest rate hike by the Federal Reserve has not only affected the banking sector but has also triggered potential issues in the commercial real estate market. Landlords’ cash flow, commercial foreclosure vacancies, and loan restructuring have all come under the scanner. Quinton shed light on these issues and shared strategies that banks may employ to manage these effects.
As the conversation pivoted towards the mortgage-backed securities market, Quinton unpacked the volatility that the Fed’s rate hike has instigated. The market uncertainty is impacting lenders, banks, and operators. With 60% of U.S. mortgages at 4% or below, there’s been an influx of 3% coupon mortgages that are underperforming. The question then arises – why is this leading to increased interest rates? The answer lies in how lenders are pricing in the uncertainty.
Real estate isn’t just about navigating challenges. It’s also about recognizing and capitalizing on opportunities. One such burgeoning trend is build-to-rent communities. These communities hold significant potential for savvy investors. Quinton and I delved into this trend, discussing its growth and the opportunities it presents.
In addition to real estate strategies and trends, we also explored the potent role of real estate in financial freedom. The timing of tax payments, strategies to maximize profits, and the concept of ‘buying on terms’ were among the many financial insights shared. To top it off, Quinton recommended a few books that offer priceless wisdom for navigating the future – ‘How to Win Friends and Influence People’, ‘The Energy Bus’, and ‘Competitive Thinking and Strategy’.
To sum up, the rising interest rates present both challenges and opportunities. The key lies in understanding these dynamics and strategizing accordingly. As Quinton aptly said, “Don’t let the interest rates scare you. Let them guide you.” And with the insights from this podcast episode, you’ll be better equipped to do just that.
