BUY NOW OR WAIT FOR RATES TO DROP??

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Michael Zuber (1:01)

Fact of life that you may not like.

I fundamentally believe that higher mortgage rates equal better deals. Now, you have to be able to understand how to negotiate, how to position, how to understand what the seller has and doesn't have, because sometimes they can say yes, and sometimes they can't. But at the end of the day, folks, remember, higher rates equal better deals. All right, Sidney, I know you are a real estate investor working at Baseline, but what say you to this idea? My crazy higher rates equal better deals?

Sydney (1:37)

I love it. I would agree 100 percent. I found some of my best deals when the rates were at the highest during the peak of COVID, and I would agree wholeheartedly. I guess to second that point, I would say, a lot of folks say, I can't do sales, how do you negotiate? What does this even mean? But I would argue and say, everybody's in sales. Everything you do in life is sales, whether you're trying to go to an event and convince your friend to do so, or something a lot more complex than that.

Everybody's in sales. You will find the best deals during these moments.

Michael Zuber (2:08)

Yeah, again, people don't really understand that higher rates is a gift because at least in the world of the United States real estate, our most common mortgage on residential property is a 30-year fixed. So if you get a 30-year fixed rate mortgage today is 8% or 8.5% or 9%.

I'm going to guess sometime in the next decade, you're going to be able to refi that down to 6.5% or 7%, thus making your asset more valuable because cash flow will explode higher. But the beauty of 9% mortgage rates or 8% or whatever they're going to be is the demand, the competition goes down and seller motivation goes up, which is kind of like a double win, right?

Sydney (2:53)

Absolutely. I would agree with that. And it really comes down to almost anything. It's how you set yourself up for success. How are you creating your own luck?

Sometimes you hear stories and like, well, they just got lucky. That's not going to happen to me. Well, sometimes you have to create your own luck. And I guess I would say like maybe arguably some like one, two, three rules that we can follow to maybe create your own luck. And then when you actually have that opportunity in front of you, how do you actually win that deal? How do you negotiate it? And, of course, selfishly, how do we make it make sense as an investor for ourselves?

Michael Zuber (3:27)

All right. I like it. I don't know what this list of one, two, three is going to be, but let's jump in. What is the first rule or step in this process?

Sydney (3:34)

Yeah, I would say if you are the type of individual that says like, oh, I don't know what sales is.

Even two days ago, my best friend called me, he's like, I want a career change. I'm thinking of becoming a real estate agent. My gut feeling was to say, run away, don't do it. There's a lot of knowledge, there's all this stuff. But in reality, all I suggested is that, hey, what are you going to learn when you get into that position? And what are they going to teach you to do so? Outside of the knowledge, what they're going to tell you to do is network. And what do we mean by network? What does that actually mean? Or what does that break down to? It means everybody you know in your social circle, friends, family, everybody you talk to should know that you are in real estate or real estate agent. Same exact thing as an investor. Whether you have one property, 1,000, folks should know that you're interested in real estate. Folks should know that it's what you want to do. The other angle is the knowledge you create with that. Do we have money? And do we want to buy real estate, and we know we have the money so we can do so? Or two, do we have no money? And what are those two underlying factors? One, if you have money, you still need some of the knowledge. You do need to put yourself in a position that you're confident in the deal, you still understand what you're trying to create from that. And two, if you have no money, you need the knowledge to back it up so if you do win a great deal, you can go to somebody that has the money to work with.