Real Estate Investor · Jupiter, FL · Member since 2013 · 42 posts · 14 votes
I'm interested in hearing from some seasoned investors that have been through several housing cycles. I'm in the South East Florida market. From 2009-Present the housing prices are getting closer to the peak levels of 2006. Would it be prudent to cash out profits now and move them to a more stagnant Midwest market to achieve higher cash flow and wait for the next decline to hit in order to start investing in Florida again or would you let it ride? Would your answer change if you had a strong equity position in all of your rental properties and they were all cashflow positive?
Investor · Miami Beach, FL · Member since 2016 · 486 posts · 216 votes
10y
So in 2006 most purchasers used 90% to 100% financing and it was easy for them to just walk away. In today's market probably 60% of buys are all cash and 40% are with supstantial down payment. So the quality of the buyers are much higher and in that sense the markets aren't the same and is much stronger and stable. Also rents are 50% higher then in 2006 and re taxes are lower.
It all depends on what your strategy is. If you in for long term cash flow and your current flow is comfortable then why change to unknown market.
If your target is to cash out and pay off your debt and get out then probably a good time to plan your sales.
I don't think that appreciation is as high in mid west as in Florida however you may find higher cash flow deals then here and can get higher returns if you sell high in Florida and buy low in Mid west. Just don't forget to factor in been an absentee landlord and add on that as an extra expense.
Rental Property Investor · Cleveland, OH · Member since 2015 · 1k+ posts · 880 votes
10y
I rode the wave through the last cycle in Phoenix before moving back to the midwest. In my opinion, investing for appreciation and investing for passive cashflow are two different things. If you have strong equity positions in rentals, get the best of both worlds and hold on to them and cash out refi the properties. Take the cash and put it in a strong performing midwest rental market like Cleveland and then continue to reap the benefits of the rentals' cashflow.
Real Estate Investor · Jupiter, FL · Member since 2013 · 42 posts · 14 votes
10y
Cash out refi would put me at risk I feel if the market tanked and the rents dropped. I'm currently putting all buying on hold and aggressively paying down all my debt.
Investor · Miami Beach, FL · Member since 2016 · 486 posts · 216 votes
10y
So in 2006 most purchasers used 90% to 100% financing and it was easy for them to just walk away. In today's market probably 60% of buys are all cash and 40% are with supstantial down payment. So the quality of the buyers are much higher and in that sense the markets aren't the same and is much stronger and stable. Also rents are 50% higher then in 2006 and re taxes are lower.
It all depends on what your strategy is. If you in for long term cash flow and your current flow is comfortable then why change to unknown market.
If your target is to cash out and pay off your debt and get out then probably a good time to plan your sales.
I don't think that appreciation is as high in mid west as in Florida however you may find higher cash flow deals then here and can get higher returns if you sell high in Florida and buy low in Mid west. Just don't forget to factor in been an absentee landlord and add on that as an extra expense.
Real Estate Investor · Jupiter, FL · Member since 2013 · 42 posts · 14 votes
10y
I do not rely on my cash flow now and my goal was to have everything paid off within the next 6-7 years so that I could choose to live off the cash flow if I chose to stop working.
Investor · Peachtree Corners, GA · Member since 2012 · 131 posts · 83 votes
10y
I'd sell some and keep some to pay down your debt.
If you have a house worth 120-140k pulling in 1k rent I'd sell it.
If you have some worth 60k pulling in $800-$900 I'd keep those.
Take some of the profit from your 140k house and buy another cheapie while using the rest to pay your debt down. I think we have a little bit of time before the market dips.