Wyatt, let's stay with you, talk about how the interest rate environment,
what you're seeing right now economically, how it's impacting the type of investing
that you normally do. Great question. Thanks, Joe. We have, because we have a
smattering, right, of everyone from, "I just started yesterday in investing and I'm
running this all the way through and then those that are on the passive side and
they want to deploy a lot of capital. And so what I've been telling people lately
is the numbers are crazy. They don't really make a lot of sense for the buy and
hold investor, but they may again very soon. And we have seen a lot of trepidation.
And I would say I'm telling And if they're in the fix and flip business,
right, don't go for the high end, do less, charge less.
People are looking for a deal right now, and that is a quick way to get in and
out on things that you're doing. Makes sense. Erwin, what are you seeing? For a
year and a half, we did nothing because of interest rates.
And we're seeing a lot of deals come back to the market that didn't trade two
years ago, at lower expectations, sellers that need to sell funds that are at the
end of their life. And so we're finding a lot of deals at nine to 10 cap rates,
which even in today's financing rate, you can still distribute nine in the first
year. And then if you can work the tenants and some of them we're seeing still
need to be converted from gross leases to modified or net. So there are
opportunities out there. And I think over the next two years you're going to see a
lot more opportunities. I know I've seen big players in the industrial space like
Clarion Partners reiterate between 25 and 28. They think it's going to be, you know,
buyers are going to have a lot of fun.
That makes sense. That makes the old Jack. What are you seeing? Yeah, for us, it's
a little bit different. You know, our fund is very low leverage. The family has
seen in their other businesses things go down. But for us, you know, we're putting
out loans between, you know, 14 and 17 % year plus a few transaction points. So for
our business, it's more just about picking the right partners to ensure that, you
know, we're getting paid on our loans and everything goes well. But we haven't
really seen interest rates affect us, to be honest. It's actually been a been a
pretty busy last two or three years. Matt, when you guys are doing your hard money
lending, what,
What are your rates? I mean, what packages do you see that everybody really says,
"Okay, I can do that"? - We're six months to 36 month terms, 10 and a half to
14%. And to be quite frank, on our end, the interest rate normalization process that
we've seen has been kind of a breath of fresh air. I mean, rates were so low that
you kind of had a wonder of what reality was. So I feel more confident today than
I did two years ago. And I think moving forward, the rates aren't gonna move that
much. I don't think they really can. And I think it's positive for people that are
interested in real estate values. - I'm just curious, just go down the road.
How many of you guys think that rates are pretty much gonna stay right where they
are for the remainder of the year? Why? - I do, I think they'll stay about like
this. about like this yeah I think they're gonna bounce around in a tight range for
a while yep yeah Jack I'd agree okay absolutely it's it's what we want or what we
think what do you think fluff rates rates will be flat for a long time yeah I'll
agree with that but if I was a betting man I'd go against whatever I say because
I'm usually wrong so I mean you know look I've told this story before I got
licensed when I was 19 years old. The year was 1973. Rates were seven and a half
percent. Nobody thought it was high. Nobody thought it was low. It was the rate.
The only reason you're dealing with that now is, as you said, we have these
artificial, as the government flows trillions of dollars into the economy, you're
going to hold those rates low for 12 years. It was La La Land anyway,
speaking of that, we are in La La Land.
So the reality is, just the take that I see, and obviously we're very large real
estate coming all over the world, I don't think we're just going to modulate much
at all. I think they'll sit between six, seven percent, you're the new right.