Why The Fed Isn't Done Yet: What Investors Need To Know

SPEAKER_1 (0:00)

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Michael Zuber (0:31)

Folks, buckle up. According to Fed President Waller, he says that more hikes are needed as investors wait for inflation to finally be broken. Now, of course, we've had a couple of Fed presidents talk about, you know, waiting more time, but you now have an influential Fed member saying rates are going up.

I just wanted to bring Stephen Dow into this. Before we do, though, please do that marketing thing so we don't get in trouble.

Stephen Dow (0:59)

Although, again, I worked very happily for Velocity Moors Capital. All the ideas and topics discussed on this channel, that of my own. So let's get another good one going.

Michael Zuber (1:07)

Yeah. So we've seen the 10-year note break through 5 percent. It's been trading around 5.3 percent. But these are some 7.6. Investor loans are at 8

It's actually good for Velocity, but bad for others. What's going on with rates? And then we'll talk about something Graham Steffen just said. Yeah.

Stephen Dow (1:32)

I mean, as it pertains to rates, we haven't really had that knee-jerk reaction over the last few weeks.

Michael Zuber (1:43)

You're not doing daily or multiple times a day updates.

Stephen Dow (1:46)

Right. Yeah, I mean, last time we changed the rates was September 14th, and that was only up for like 30 basis points. But since then, we haven't touched that rate. So, generally speaking, conventional rates have jumped up.

We've ever really been in the last several months or even a year. So, at this stage, yeah, my loans are looking much more feasible, given the difference in rate isn't that great. But the fact that they can't qualify going those regular, well, not regular, but conventional means, as far as full doc, DSCR, because unless they're rental income or personal income jumped up half a point, 75 base points, then they're not going to qualify.

Michael Zuber (2:30)

It's funny, I'm hearing from more and more lenders that conventional lending is down, which kind of makes sense, right? You know, 7.6.

Prushing it right now. They're up double digits.

Stephen Dow (2:44)

Well, I mean, I think you talked this with Dustin the other day or last week, but rates on DSCR loans are lower.

Michael Zuber (2:53)

I know.

Stephen Dow (2:54)

Conventional loans. But it's crazy still.

Michael Zuber (2:56)

That's crazy.

Stephen Dow (2:57)

I know. And I'm like, there's something wrong with the system because that doesn't make any sense. But anyway, yeah, I would have to agree with where the market's kind of heading.

Definitely take a front seat at this stage, because if you can't qualify with the normal conventional means, there's only alternatives at this stage. You know what I mean? Right before you were maybe forced to use hard money, you should definitely check out Bankstam and DSCR or even my type of loans. Just kind of see the differences in pricing and fees and such. And it will be typically pretty, you know, possible.

Michael Zuber (3:38)

What's going on is conventional loans are, I don't want to say tougher. That's not probably the right word. But they take more time, right? There are full 30 days, maybe 40 days, right? Conventional loans. DSCR loans are just faster, right? When you work with a professional, they can be as quick as 12 days, maybe 15 days. Sometimes if you pull some strings like I like to, they can even be shorter, which I've done. I've pulled in personal favors, which I'm okay with. But again, I think one of the things is rates are shooting up. Mom and dad, or I call mom and dad the investors, they're scared of 8% mortgage rates.

So they don't have an eight handle. I think that's what's going on. I think that's why DSCR is winning and conventional is losing its time.

Stephen Dow (4:25)

I would agree with you if they're working with a seasoned professional that should be advising them, as far as reading the room, taking the temperature. If you're thinking, oh, I'm going to wait on the sidelines and-

Michael Zuber (4:42)

Higher for longer, baby. Higher for longer.

Stephen Dow (4:44)