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Looking back over the last week, it is clear that the 10-year yield definitively has some momentum going in the upward direction.  In the chart below, one can see that the yield has moved up from about 2.45% (at the start of the year) to 2.85%.  Moving up about 40 basis points (over a month’s time) has not occurred since the massive run-up in November of 2016.  Hopefully the ascent upwards will slow.

It seems that the expected rate increases from the FED (coupled with improving global economies) is causing the increasing rate environment.  And, the stock market is also showing greater volatility as well.  How well the FED handles the variables will dictate the effects we feel in both the stock, interest rate, and real estate markets.

Note following up on tax discussion from last week:

I heard from one of my tax contacts; and they stated it is felt that the self-employed will still be able to write off client business meals.  It was clear though that client entertainment was no longer deductible.  Just make sure you check with your own tax advisor.

Investments Opportunities for Purchase with Strong Cash Flow:

Back on the January 15th update, I wrote about “Creating Residential Listings Using Commercial Opportunities.”  This week I want to present 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 (for a larger version of the list, chlick here).

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 below.  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:

The World Property Journal reported “Aging Population Driving Medical Office Demand in U.S.”

Commercial Property Executive reported “IRR Report: Cautious Optimism for Moderate, Steady Growth in 2018.”

The Registry reported “Google Expands in San Jose, Spending $117.25MM on Three Industrial Buildings.

See the table below for approximate interest rates.
Type Rate Fixed Term
Apartments 4.300% – 4.965% 3 to 10 year (30 yr amortization)
Commercial 4.630% – 5.265% 3 to 10 year (25 yr amortization)
SBA Lending Call for Options Call for Options
SV Commercial Lending