Scorched Earth. Is the market going BUST?

[Nicholas Salvia]

hey all

Wondering what everyone thinks about the market going bust when the Fed EVENTUALLY and INEVITABLY hikes the rate.  Id love to hear from some professionals who have been in the business for a while.  

Do you see the market downturn ahead?

For a first time investment buyer would you suggest waiting for the correction?

Do you not think a correction is coming and this is all just part of the "scorched Earth" concept that cripples folks from committing to any form of investing.

Would love to hear all input on this subject! I have enough capital to pull the trigger NOW but im in the NJ/NYC area.  The prices are HIGH and im wondering if i should wait it out before making the move.

Thanks,

Nick

[Justin Fox]

If you have fixed rate mortgages, you don't do anything.  You keep renting and making money.  If you continue to acquire more properties, you either make sure the market will support higher rents to maintain the same margin through the hike(s), eat a little to still make some money or be content for awhile and hoard some cash.  But if rates hike and property becomes cheap enough, the debt service cost might only be slightly higher.

Historically rents generally don't change much through a downturn in real estate, much less go down.

  It also depends on what you do in RE as well.