The end of "easy money" (low cost debt)

by an investor from University of Minnesota - Carlson School of Management

1 year ago

Another week begins and another (potential) interest rate increase is on the horizon... 

How are you adjusting your acquisition financing strategy to address the increased rates? More equity?

#debt
#equity

6 likes
215 views
12 comments

searcher from Yale University - School of Management

Make the case to your seller to carry a larger note at an increased rate and look at a cash sweep (50% or more) to accelerate his time to payback. Some sellers might have an allocation challenge from their windfall... hard to find a vehicle that provides an 8-9% "guaranteed" return anywhere else. I was able to do this to avoid borrowing from a bank or private lender altogether.

1 year ago | like reply | 2 likes

searcher

Fixed-rate is equivalent to hand-cuffs at this current rate regime.

1 year ago | like reply | 0 likes

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