Multi-Family Reality Check … Rates Are “Really” Low!

 

This is a brief interview of Stephen Rosenberg, the CEO of Greystone, being interviewed towrds the end of last year about trends he sees happening in multi-family. Greystone is a multi-family lender based in New York City.

Of the number things he speaks about, the one thing that jumped out at me when he mentioned it was long term fixed rates at 2.5%.

Think about that for a second.

2.5%!

The Fed has been making funds available to banks for close to 0% for a number of years now, and I think we must be getting used to it. Maybe it’s mentioned on the news enough that it just goes in one ear and out the other. However, for multi-family investors who have been around for a while, i.e. since before 2001, we recognize that 7-8% is more normal.

It’s time for a reality check.

Although it’s unlikely interest rates will be going up in the next few years, rest assured, there will be a point in the future when they do start increasing again. It might be five years, it might be ten years, who knows. But when interest rates do start inching upwards, everything will change, and the  opportunity that today is staring apartment investors in the face, the ability to buy good solid properties with long term 2.5% fixed rate mortgages, will be gone.

If you are in any way interested in apartment investing, now is not a time to hesitate. Now is a time to act.