Ā
I'm at a real estate conference in Santa Monica. The content is great and a bit above my pay-grade. Lots of guys here who do own huge apartment buildings, self-storage, mobile homes, construction companies, etc.
Ā
But I listen closely because real estate is a fractal business. The tiny, lower levels are identical to the massive, upper levels. And the important parts are the same: down payment, cash flow, value-add, etc. So lots to learn.
Ā
So, what is everyone talking about? You guessed it: Rising interest rates. Fixed interest rates (i.e. 30-year and 15-year loans) are not available in commercial real estate. These guys are sweating. The monthly cost of what everyone at this conference own is going up, now or soon.
Ā
So yet again I am struck by what an insanely good investment a single-family home is, for the simple reason that your biggest cost of ownership (your mortgage payment) never goes up. In fact, factoring inflation, it goes down. *You can also get a fixed rate on income property up to four units, just saying.
Ā
Tell your kids: the biggest expense of your life is not taxes. It's interest.
Ā
And the most expensive thing you'll ever buy is a house. To be able to fix the interest cost of that thing for 30 years (and lower it when you can!), makes houses, to me, the best investment you can ever make.
Ā
They should ask me to be on a panel next yearā¦
Ā
