THIS MARKET IS ON FIRE!

I'm selling some homes I never planned on selling.

Why? Prices are high, and I'm stuck with some loser homes (in a different market) I should've sold before the last big downturn.

The house I put under contract yesterday, I would've been not wanting to show a rental prospect to. A family moved out a few days prior, left some junk behind, house was a little dirty, etc... sold to the first person to look at it, who had chirping smoke detectors going during their tour of the home....

Is everyone else seeing this too? At what point should a person liquidate everything?

There's got to be a threshold to cash in the gains, make other moves in the meantime and then buy like crazy during the next correction... where is that threshold for you?

I'm with you on that.

There's no telling what the future holds.

They are going to raise interest rates several times this year.

The mid terms elections are this year. Who knows for sure who will win or the results.

Politics is getting more devisive, if that's possible.

Prices are high.

I intend to take profits now!

All the outlying places, all places that have any problems at all are going to be sold, hopefully by summer.

Then I can look for foreclosures and fixer to buy at half price or better.

I believe what you're asking for is "how do I time the market?"

The only correct answer is, "When you've hit your goals, lock in your gains."

Anything else is wishy-washy, shoulda/coulda hind-sight is always 20/20.

I'm about to the point where I've stopped looking, except at the occasional off market deal. Prices are UP, but not up enough for me in my Class C hoods to cash out. Rents are also up, so there's no reason for me to sell an ATM that spits out more cash every month (some 2-3x per month).

When prices crash (and they will), I believe rents will hold steady and possibly gain. There will be a lot of broke people who lost homes turning into renters, pushing prices higher. Also, renters will be used to the higher prices and land lords who have locked in their higher cost properties won't be able/willing to discount very much, if at all.

For those who are selling now in 'hot markets',..what Class (A,B,C, etc.) are you selling in? Also, what are you listing prices?

I have one house for sale in a Class C hood and I have yet to get an offer worth putting on paper. It has been on the market for 6 weeks and I did my first price drop today.

I have no interest in selling anything. If I sold a unit, what can I do with the cash I'd get that could match the returns of a nice rental property?

Just sit on the cash and wait for a market correction, when I could buy more units? And in the meantime, earn 1% on the cash? Doesn't sound attractive to me.

No inventory in my area. I was speaking with a commercial real estate agent last week and he told me inventory is so tight on the residential end that residential real estate agents are starting to move into commercial. On the commercial end, cap rates have compressed to the extent that C class multi's are priced as if they're in prime areas. We're talking about folks asking for 5% to 7% caps for stuff that would be going for 9% + six months ago. Unless there's a serious outbreak of gentrification (which is definitely possible), that's a money losing proposition. I'm buying and holding at present, but if someone offered me some ridiculous money, I'd have to consider. Like all bubbles, this will not end well and the thing that will pierce it is interest rates.

The only thing that could affect rental demand and prices is supply, but as I understand it, most of the supply being built is on the higher end. I think class C is the place to be as when this thing bursts, there will be some downward migration into class C. My properties are in dense urban areas where nothing can be built anyway and there's a movement to gentrify some of these areas but it has not taken a firm hold yet. I'd be better off holding not only for cash flow but for further appreciation if gentrification takes hold.

Go #22 GO!

Btw, #22, congratulations on getting those St. Louis properties sold. I know they've been fun to deal with. (wink)

I'm in consolidation mode now. Gradually improving existing properties, raising rents, and stockpiling cash for the next bust. Who knows when it could happen? I suppose if it keeps going up for awhile, I could see some appreciation in my little ATMs. Worst case, I end up with extra cash to buy more when the crash does finally happen.

Construction is not keeping up with demand and quite frankly it won't for a very, very long time.

Over the past couple of years because of new building codes and material cost increases the cost to build has gone up 25%-30%.

Throw the labor shortage we have on top of it and you are in a perfect storm.

I'd love to build more but I only have so much labor.

None of these things are getting fixed anytime soon.