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3 Real Estate Investing Strategies Best Suited to Current Environment

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  • Quentin D’Souza has amassed a real estate portfolio of 41 properties and 541 units.
  • He said he advised investors to focus above all on underwriting deals.
  • According to D’Souza, trading timing is never perfect.

When mortgage interest rate At their highest level in decades, house prices have fallen slightly but are still soaring after two consecutive years of double-digit growth.

However Quentin D’Souzais a real estate investor with a portfolio of 41 properties and 541 units near Tampa, Florida and Toronto, Ontario, and says the timing can never be exact. Instead of focusing on unfavorable macroeconomic factors, investors should ensure that prospective property rental free cash flow is high enough to cover costs.

“You still want to move forward,” D’Souza told Insider last week. “A year or two ago, people were complaining that housing and apartment prices were too high. And now, People are complaining that interest rates are too high.There is no perfect time.As an investor all you need to do is figure out how to make the trading system work so that it is a good investment for you. is a trading engineer.”

Still, investors should be patient and make sure the deal is right, D’Souza said.

“It takes time. Nothing is urgent at this point. Patient money is the best money,” he said. “I think the next 12 months will bring some good opportunities, so make sure you’re ready to take advantage of them.

How D’Souza pivots amid high interest rates

D’Souza said he encourages buying if the deal is right, but that financial pressures are pushing him toward a shift in his acquisition and financing strategy.

For example, he now Assumed loan more. A notional loan is when the buyer assumes the seller’s debt and makes a new loan. This favors current buyers, as the rate was likely lower when the seller bought the property than it is today. 30 year fixed rate mortgage is currently around 7%.

“If we can take on low-interest debt, we will,” D’Souza said.

D’Souza also seller financea strategy that essentially takes banks out of the equation when buyers and sellers come up with their own deals.

“The other thing that we do differently when making deals is what we are looking for. seller loan D’Souza said: To complete the strategy with assets. ”

D’Souza said he can find these deals by asking the network of real estate people he has built.

“It’s asking. If you don’t ask, you’ll never get it,” he said.

If he has to use traditional funding methods, D’Souza said he prefers traditional lenders (private banks) to government lenders like Freddie Mac and Fannie Mae..

This is because traditional lenders offer higher loan amounts than government lenders.

If the investor is indebted, D’Souza recommends using a higher-than-expected interest rate to “stress test” the trade for positive cash flow.

Regarding the current investor exit strategy, D’Souza said he likes the rent model because it boosts cash flow. He also said that with interest rates at their highest level in decades, he will postpone refinancing plans for a year or two.

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