For the first time in about 2 months, the 10-year yield broke out of its trading range. In the chart below, the yield dropped down below the 2.8% support line. As often written in this blog, the yields (and therefore interest rates) are affected by a lot of factors. Is this a new trend? No. This is just providing an opportunity for those contemplating financing in the residential and commercial markets.
Continue meeting with clients to determine their investment timing and strategy. Clients are no different than the rest of us. They too are looking for answers from folks in the trenches.
Investments Opportunities for Purchase with Strong Cash Flow:
Back on the January 15th update, I wrote about “Creating Residential Listings Using Commercial Opportunities.” Each week, I am presenting some of those investment opportunities to better educate all on what is actually available. Note that these are all Single Tenant Net Leased properties that have listed in about the last 10 days. In addition, I assumed a 5% loan with 50% down. This is just a small sample of what is actually available.
If you assume investors in the Bay Area are getting a cash flow of 3.5%, then you can see the potential improvement with these properties above. This approach is great for the investors desiring increased cash flow, an opportunity to get out of daily property management, and/or taking the challenges of rent control off the table. Should you wish to discuss any of these or others, then give me a call.
That’s it for this week. As always, feel free to give me a call with any of your strategic financing needs.
Articles of Interest:
Forbes reported “Why It’s Time To Add Commercial Real Estate To Your Investment Portfolio.”
Bisnow reported “Tax Reform Could Create A Tailwind For Real Estate In These Coastal Markets.”
Curbed shared “Santa Clara County median home price surges past $1 million.”
The SJ Mercury News reported “Bay Area rents climb ahead of apartment-hunting season.”
|Apartments||4.295% – 4.850%||3 to 10 year (30 yr amortization)|
|Commercial||4.615% – 5.150%||3 to 10 year (25 yr amortization)|
|SBA Lending||Call for Options||Call for Options|