DON’T LET SCAMMERS GET YOU DOWN
PROTECT YOURSELF AND YOUR MONEY
Over the last 12–14 months, investor demand for apartment investments has been high, thanks in large part to low interest rate financing. As of this publication, rates are running from 3.75%–4.25% and can be fixed for 3–10 years, with terms ranging from 3–30 years. So, how does this impact the value of apartment communities? Simply put, the lower the interest rate, the lower the loan payment. And the lower the loan payment for an investor, the more the investor can afford to finance — meaning they can pay more for the property. For example, if you got a $500,000 loan at 6% with a 30-year amortization, your loan payment would be $2,997.75 per month. However, if your interest rate was 3.75%, your loan payment would be $2,315.58 per month. That’s a FULL $600 less per month! Theoretically, that means if you have a target income and return in mind, then you can afford to pay $60,000–$80,000 more for the property with the 3.75% rate than with the 6% rate to hit your target income and return. For the owners and sellers of apartment communities, this translates to getting an additional $60,000–$80,000 in sales when interest rates are low. Think about that for a second. Without any extra time, effort, energy, work, According to a recent survey by the American International Group (AIG), a majority of Americans over the age of 65 don’t know much about the myriad financial scams circling the globe. Reports show that ignorance of these scams has proven costly for the 65-plus crowd, who are the most frequently targeted demographic. IS IT LOVE? One common shakedown taking seniors and retirees for a ride is the online romance scam. As part of it, a person poses as a potential date or romantic partner and engages in a fake relationship with the victim. The scam usually starts with an online or web-based dating service and progresses to texting or talking over the phone, but it always stops short of an in-person meeting. Instead, after the scammer has gained the trust of their victim, they’ll claim there’s been some kind of emergency for which they need money fast. The clueless victim usually offers to wire them the money. In many cases, the scammer will continue asking for money for as long as they can get away with it. Then, once the victim figures they’ve been bamboozled and try to retaliate, the scammers vanish — off to find their next target. DID YOU PAY? Another prevalent rip-off is the invoice scam. Again, AIG reports that about 57% of people aged 65-plus aren’t familiar with this sham. In most cases, the victim receives a phone call or email from a representative of a local company, who says they still owe money for a bill or service. For example, HAPPENINGS AT HEARTLAND
the scammer may tell the victim they owe an overdue $50 for their power bill. If the victim says they’ve already paid, the scammer might respond, “Your payment didn’t process correctly.” The crook’s job is to get the victim to relent and pay up. Then, once they’ve been paid, usually via credit card number or wire transfer, the scammer once again vanishes along with a significant portion of someone’s bank account. Scammers want your money, but if you are aware of today’s hustles, you can better protect yourself and your assets. Luckily, AIG also found that nearly 92% of the 65-plus crowd now ignores phone calls, texts, and emails that
request personal information, and 89% of these folks say they avoid clicking links from unknown senders. Be vigilant and remember that if someone calls you and demands personal information over the phone or asks you to wire money, there’s a very good chance it’s a scam.
INTEREST RATES ARE ‘BORING’ — UNTIL THEY MAKE YOU MONEY
or capital improvements, you can get an additional $80,000 at the closing table, all because of low interest rates! This is one reason why many “experts” and real estate brokers are urging their clients to sell their multifamily properties. Low interest rates mean they can command high prices that will be out of reach if
and when rates climb higher. Darin is certain rates will climb (they always do), but for now, the FED’s actions are keeping interest rates low, and they likely will for another year or more. That’s why, looking into what he jokingly calls “Garman’s Crystal Ball,” Darin sees apartment community values growing even more over the next year and possibly beyond. So, next time you hear talk of the FED lowering or raising interest rates, keep in mind that every time rates go down, apartment values rise. Every time rates go up, values could start to level off and then turn in the other direction. It is a wise move for passive and active apartment community owners alike to keep an eye on rates and judge how well their properties are doing. Of course, our team can keep you informed of what’s going on behind the scenes. If you have questions about interest rates, contact Darin today!
2 DARINGARMAN.COM
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