Interest Rates vs Income Ratio

The way I see things is interest rates are really irrelevant. It's more of a ratio to income that we should look at in all things in life. Like in all things, like when somebody says the interest rate's 8%, I'm like, well, it's high, but in comparison to my income, is that $5,000 note, like, is it 10% of my income? Is it 5% of my income or is it 50% of my income? That would make a difference to me.

Yes. Versus the interest rate. That's one of them. I love that you said that because I have loans. Loans at 3% interest. I have loans at 13.5% interest.

Yeah.

The 13.5% interest loans are still on some of my highest cash-on-cash returns. My debt service coverage ratio, which I think is a fantastic metric to look at, that's your, I mean, that accounts for all expenses, is sitting on those deals at like a 1.6 debt service coverage ratio. I pay myself 60% when I pay the bank. If you're paying the bank 13.5% and you're paying yourself 60% of that, I would argue you're doing pretty darn good on that deal.

Yeah. Yeah.