CHERYL: NEW DATA FROM FREDDIE
MAC SHOWS CRITICAL 30-YEAR
FIXED RATE MORTGAGE MOST
POPULAR IN THIS COUNTRY PAUSED
RECENT DECLINE FALLING TO 5.7%
WEEK ENDING JUNE 30 THE FIRST
TIME IT HAS FALLEN OVER THE
LAST MONTH, I WANT TO BRING IN
CAROL FOUNDER CEO PATRICK
CAROL GREAT TO HAVE YOU HERE
KIND OF GOES TO THE ARGUMENT
YOU MADE YOU HAVE BEEN ON SHOW
BEFORE THAT ALL ABOUT THE
SUNBELT RIGHT NOW, WHERE THE
OPPORTUNITY IS WHERE PEOPLE
SHOULD BE LOOKING.
>> I HAVE BEEN ACQUIRING
PROPERTIES IN SUNBELT STATES,
SINCE 2004, SINCE 2011 OVER 20
BILLION TRANSACTIONS, I LIKE
TO CONSIDER MYSELF EXPERT IN
THIS SPACE, WHAT WE SAW EARLY
ON WAS BASICALLY THIS IS A
LOWER COST, YOU KNOW
BUSINESS-FRIENDLY HIGHER
LIFESTYLE, TYPE OF LIVING, YOU
KNOW.
SO FIRST, WE SAW COMPANIES
STARTING TO MOVE DALLAS,
TEXAS, AUSTIN, TEXAS TAMPA,
FLORIDA SOUTH FLORIDA, WITH
JOBS, OBVIOUSLY, THE PEOPLE
COME THEN FOLLOWING COVID,
EVERYBODY MOVED OUT OF THE BIG
CITIES WANTED SPACE WANTED
BETTER WEATHER SO IT HAS
BROUGHT A LOT --
>> MORTGAGE RATES, WE’RE
TALKING 500 DOLLAR DIFFERENCE
ON A MORTGAGE.
SOMEBODY THAT MOVED TO
FLORIDA, BOUGHT OR BOUGHT IN
TEXAS NOW SAYING THEIR
MORTGAGES JUMP WAGES MAY NOT
BE JUMPING THAT IS THE PROBLEM
ALSO PUSHINGOUT NEW HOMEBUYERS
GETTING KICKED OUT OF THE
MARKET WE ARE GOING TO SEE A
LOW SLOWDOWN I THIS I MY
POINT.
>> I THINK SO SO I THINK
PEOPLE WILL RENT LONGER RENTAL
HOUSING IS VIABLE PERMANENTLY
ALLOWS TO BE IN AREAS NOT
LOCKED IN BY BUYING YEAH, A
POSITIVE FOR OUR BUSINESS.
CHERYL: RENT STORY IS
CHANGING TALK ABOUT THAT,
BECAUSE THE COMPANY HAS BEEN
RAISING RENTS BUT YOU WERE
TELLING ME BEFORE WE CAME ON
AIR BY 30% GET READY FOR HATE
MAIL WHAT IN TERMS OF RENTER
RETENTION HE SENTIMENT IN THE
MARKET, ALSO HAPPENING IN
NORTHEAST CITIES AS WELL LIKE
HERE.
>> DAY SUPPLY AND DEMAND
PEOPLE NOT THRILLED TO SEE
RENT INCREASES I THINK ONE OF
THE IMPORTANT THINGS BEFORE
NOW OUR COSTS ARE GOING UP AS
OUR COSTS GO UP OF INTEREST,
OF RENOVATIONS, EMPLOYEES, WE
NEED TO PUSH INCREASES ALONG
TO RENT INCREASES, HOW LONG
SUSTAINABLE I AM NOT QUITE
SURE BUT, IT HAS BEEN
SOMETHING WHETHER WE’VE BEEN
ABLE TO RETAIN, OCCUPATIONS
ALL-TIME HIGH WE HAVEN’T SEEN
SLOWDOWN YET.
CHERYL: ARE YOU SEEING NOT
JUST YOUR COMPANY BUT A
REGULAR HE HOMEOWNER RENTING
OUT THEIR HOME BECAUSE THEY
SEE BUSINESS OPPORTUNITY RIGHT
NOW BECAUSE PEOPLE THAT CAN’T
BUY, ARE REVISING THEY HAVE TO
RENT.
>> ABSOLUTELY, I MEAN THAT IS
HOW I STARTED IN 04 BUYING
SINGLE-FAMILY HOMES RENTING
OUT I AM GETTING READY TO
LAUNCH A PART OF BITS SINGLE
FAMILY FOR RENT ALMOST
FULL CIRCLE BETWEEN AIRBNB,
AND APPLYING HOMES TO RENT OUT
A GREAT WAY FOR PEOPLE TO GET
INTO THE REAL ESTATE BUSINESS.
CHERYL: INTERESTING THAT IS
WHY YOU DID IT HE LABOR SUPPLY
COSTS AS FAR AS CONSTRUCTION
HOMEBUILDERS TRYING TO CATCH
UP WOULD LOVE TO BUILD MORE WE
HAVE LOW INVENTORY ACROSS THE
COUNTRY BUT INFLATION COSTS,
OBVIOUSLY, ARE A FACTOR WHAT
ARE YOU SEEING OUT THERE.
>> THE SUPPLY CHAIN IS KEPT
CONSTRUCTION DOWN, COSTS GOING
UP, YOU KNOW MAKE CONSTRUCTION
A LITTLE BIT LESS VIABLE, SO
WE ARE SEEING A SUPPLY DEMAND
IMBALANCE, THERE IS NOT AS
MUCH AFFORDABLE HOUSING, FOR
PEOPLE THAT WON’T TO LIVE IN
THESE AREAS HOME BUILDERS
CAN’T KEEP UP CAN’T MAKE
NUMBERS WORK NOW LACK OF
ADMIRERS CAUTION OF MORTGAGE
RATES THIS IS KIND OF PERFECT
STORM FOR THE MULTIFAMILY
BUSINESS, I KNOW THAT WE’VE
BEEN IN SINCE 2011.
>> I GOT TO ASK YOU I GET
ASKED ALL THE TIME, WHERE DO
YOU THINK MORTGAGE RATES ARE
GOING TO BE BY THE END OF THE
YEAR EVERY FORECAST IN JANUARY
HAS BEEN COMPLETELY WRONG.
>> OKAY.
I WILL PUT OUT A WRONG ONE TOO
GOING TO BE HIGHER I THINK FED
WILL GET A LIT TOO AGGRESSIVE
ON RATES HAVE TO PULL BACK BY
THE END OF THE YEAR I THINK
THEY WILL BE HIGHER.
CHERYL: ARE CAN WE GO 6 1/2?
>> 6 1/2 ON 0 YEAR.
>> 6 1/2%, ON 30-YEAR BETTER
THAN WHAT OTHER PEOPLE HAVE
BEEN SAYING 8% MY PARENTS PAID
14% IN EARLY ’80S WE DON’T
WANT TO GET THERE.
>> HOPE NOT GOOD FOR RENTAL