I Don't Have a Take. But the Bond Market Does. |
Three weeks ago I had Chris Martenson on our webinar. |
This week he's sitting with Tucker Carlson, walking through how the wars in Iran and Russia are really about energy, and what that does to the price of everything. |
I watched it and had one clear thought. "ok...now what?" |
Because here's where we are as I write this. Brent crude blew past $100 a barrel. WTI is over $90, up more than 30% in a month. The 10-year Treasury hit 4.7%, its highest since early 2025. Before this latest round with Iran, that same 10-year was under 4%. Stocks just had their worst day for the big names since the tariff mess back in April of last year. |
And the Fed meets Tuesday. |
So what does all of it mean? |
I have no clue. I copied all those stats from sources online, they all sound really important though. |
I'm not going to sit here and pretend I can tell you where oil settles, or what the Fed does on the 29th, or whether equities are done falling. I buy houses. I've done it close to 700 times. That's the thing I actually know. |
But I pay attention to the people who do know their lane. And right now the people I trust are all saying some version of the same thing. Energy is the story. Inflation didn't fully leave. And rates are not coming down to save anybody this year. |
Here's the Part I'm Actually Sure Of |
I don't need to predict the Fed. |
The bond market already made the call for me. |
Think about it. Whatever gets said Tuesday, the 10-year already went from under 4% to 4.7%. That's the number that actually sets mortgage rates and the cost of money for the deals we do. The market didn't wait for a press conference. It repriced on its own. |
So the question I keep coming back to isn't "will rates go up." It's "what do I do if they just stay high?" |
Because that's the base case I'm planning around now. Not a cut. Not relief in the fourth quarter. Higher, for longer, maybe higher still. |
Plan for that and you're covered whether I'm right or wrong. |
What That Actually Changes on a Deal |
Macro stuff is just noise until it touches our spreadsheet, and effects the pro forma. |
At a 4.7% ten-year, a bunch of deals stop working. Specifically, the ones that only pencil because you're assuming a refinance into a lower rate later. Those were never deals. They were bets on the Fed. |
So here's what I'm doing: |
It has to work at today's rate. Not the rate I hope shows up next year. Bummer for some of the properties I bought earlier thinking my refi would be in the 6's... |
It has to cash flow now, or have real forced equity I create, not equity I'm hoping the market hands me. |
I'm keeping more cash than feels comfortable. When money gets expensive and the world gets loud, liquidity is what lets you wait instead of panic sell. |
And every deal still needs more than one way out. If my only exit is selling into a market that might be softer and more expensive to finance in six months, that's not a plan. That's a hope. |
None of that requires me to be right about oil, or Iran, or Tuesday. |
That's the whole point. |
Real Estate Is Getting Hit Too. That's Not All Bad. |
Higher rates don't just pressure stocks. They pressure us. Financing costs more, and some buyers step back, exactly like the equity guys (stocks) stepping back from the risky stuff right now. |
But when the cost of money goes up and everybody hesitates, the people who can move calmly are the ones who get the good deals. The panic on one side of the table is the opportunity on the other. |
BUT its still super scary...sure, I wish I kept all my deals back in 2010-2013 that I bought...but I would still have to make the survive the storm until the market went up in 2015 (at least in my markets at the time)...thats 3-5 years of 'ehh' to get through. |
I'm not telling you to load up. I'm telling you to be ready, be liquid, and be disciplined, so that when a real one shows up you can actually take it. |
Good luck. It's that sort of market right now. |
One More Thing, and the Timing Is Ridiculous |
Every year Ken and I tell each other next year will be calmer. It never is. |
This year the timing is almost absurd. Oil, energy, rates, equities, real estate, all of it under pressure at the same time, and Limitless lands right in the middle of it. August 14 to 16 in Phoenix. |
This is the most important one we've done. Not because we planned it that way. Because the world decided to make it that way. |
The whole event is built around the exact question this newsletter is asking. Everything is moving. What do we actually do today? The room is full of operators and the people I listen to on the stuff I don't pretend to know, in one place, talking straight. |
It's coming up fast. If you can make it in person, come. If you can't, grab a virtual ticket. Virtual isn't just a livestream. You get into the Whova app and can network with the room from wherever you are. |
Code insider takes 15% off. www.limitlessexpo.com |
Tarl Yarber |
