Speaker B argues homebuyers shouldn't wait for rates below 6% because a 6.5 million-unit housing shortage keeps prices rising. When rates drop, pent-up demand will push valuations even higher. He says a DSCR refinance works if market rents cover debt at 1.25x and you have a solid FICO score.
So in today's real estate economy, why wouldn't someone just like sit back and wait until interest rates come down and shit like that? Too late. Too late for what?
Too late. You wait for interest rates to go below 6%, you're gonna miss the bubble. You're gonna miss it because right now people are saying, oh, interest rates are too high, property values are too high, I'm gonna wait for those to come down. Valuations aren't going to come down. They're not. You know, there's a 6.5 million housing shortage nationwide right now. What does that mean? 6.5 6.5 million people need houses they can't get, they can't find. So the demand is there, the supply is not. So valuations are going to stay with that and only going to grow. And when interest rates come down, all those families that thought they were going to buy a house in 2021, 2022 when rates were low went on hold. And they thought, well, they'll come back because they shot up overnight. When those get sub-6 Those people start buying again and valuations are going to keep going higher and higher and higher. So if you wait, you will miss out. Brad, I don't care if you have a job or not. There's not even a place on the application for you to list your employment. We don't care. What I care about is the asset. Will the asset perform? So when you're refinancing that into a DSCR, does the rents, the market rents, support the debt by 1.25 factor? If it does, you're done. If you've got a good FICO and it, uh, market rents, Close loan. It's that simple. Oh, I haven't worked in 3 years. I don't care.
