So you ask, Gena why are you talking about interest rates again? Well, because for the past 12 months or more, I have received at least a dozen or more opportunities which have neglected to project higher interest rates in their business plans.
When I see this it makes me cringe and probably the reason my doctor has cautioned me to be careful about my blood pressure. Its as if people have forgotten that one of the most important parts of investing is the cost of money which is derived from interest rates.
Please make sure that when you send opportunities for me to invest, please project higher interest rates upon exit. Don't use the words "value added" just because you are painting the building and installing new windows and doors. My definition of Value Add is that I will get all my money back and keep the asset via a cash-out refinance. I know that other's may have different definitions, but mine is this and only this, nothing else.
If you do NOT know what interest rates will be in the future, then you can use this as a projection for 2018 and beyond.
But NEVER use today's historically low interests rates with the assumption of doing a cash-out refinance in the future, as cap rates will be adversely affected by the higher cost of money. I rather you project higher interest rates. and then if they are lower, great, you would have exceeded your business plan.
I welcome others to share their stories in the comments section below as to whether they are seeing higher or lower interest rates in the deals which they are receiving?
P.S. In the event you haven't gotten stupid rich in the last decade with free money, I suggest that you quickly download and more importantly implement the steps in the Financial Freedom Formula.
How many of you care to share how much wealth you have built in the last decade as a result of all the free money? For example, my partners and I have created over $50b in value in the last decade. Share with me in the comments section below. Would love to hear your number(s).
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