The Defeat of a Potential Bubble

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The Defeat of a Potential Bubble

Account Closed
Rental Property Investor · Mechanicsburg, PA · Member since 2017 · 18 posts · 3 votes

I'd like to get everyone's thoughts on a theory I've been pondering....

I'm in Central PA and the market is and has been red hot for quite some time.  It has caused prices to increase but, nothing astronomical.  What the tight inventory has done though is make it very difficult to purchase anything- either as an investor or owner occupied.

So everyone thinks- when will it end?  When will buyers dry up and inventory increase?

I, for one, as well as many other investors in this area would love for the bottom to fall out of the market to create a buying opportunity.  As a rental property owner, I know rents won't decrease much if that happened.  In fact, they could actually increase.  As for the value of my properties, I don't plan on selling anytime soon so I would weather the storm.

Additionally, I believe many investors (at least) are sitting on resources to be able to pounce on an event (opportunity) like this.

So, with all of that said, I ask the hypothetical question (at least for areas such as mine) if everybody is waiting on a "bubble burst" can it ever happen??

Would love to hear some thoughts on this!

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Kyle McCorkel
Rental Property Investor · Hummelstown, PA · Member since 2015 · 638 posts · 653 votes
8y
@Brandon Motuk My stance is to stay actIvely buyIng but always stick to fundamentals and only buy properties that meet a strict set of criteria. Also to buy only properties where I can add value and/or have built-in equity as a bit of a cushion for if/when the market takes a dip. It’s not that I’m expecting to sell anytime soon, but I’d like to have the option to sell and the extra equity created allows me to do that. Finally keeping plenty of cash reserves and sources of capital open (lines of credit, private money). I use these sources to keep buying but position myself so they are only tied up short term until the refinance (for BRRRRs) or sale (for flips).
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  • Account Closed
    Rental Property Investor · Las Vegas, NV · Member since 2018 · 133 posts · 171 votes
    8y

    So many people are waiting for a rinse/repeat scenario of the bubble/crash from 2009, but what if that was really just a brief period of volatility in the context of the longer term uptrend, never to be repeated again in our lifetimes?

    Crash calling is fun and can make for some lively debates but it's sort of an exercise in futility because ultimately the market will do what it will do without regard for what any of us say or think.   That said, the market will always go through it's normal cycles of appreciation and corrections, but longer term the tend is up. 

    1Reply
  • Kyle McCorkel
    Rental Property Investor · Hummelstown, PA · Member since 2015 · 638 posts · 653 votes
    8y
    @Brandon Motuk My stance is to stay actIvely buyIng but always stick to fundamentals and only buy properties that meet a strict set of criteria. Also to buy only properties where I can add value and/or have built-in equity as a bit of a cushion for if/when the market takes a dip. It’s not that I’m expecting to sell anytime soon, but I’d like to have the option to sell and the extra equity created allows me to do that. Finally keeping plenty of cash reserves and sources of capital open (lines of credit, private money). I use these sources to keep buying but position myself so they are only tied up short term until the refinance (for BRRRRs) or sale (for flips).
    2Reply
  • Frankie Woods
    Investor · Arlington, VA · Member since 2012 · 1k+ posts · 491 votes
    8y

    History does not repeat itself...it simply rhymes.  Don't get passed by waiting for an opportunity that looks and smells exactly like your last experience.  Setup criteria that outperforms other investments and find deals that fit within that construct.

    1Reply
  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    8y

    It’s better to be prepared and not have an opportunity then to have an opportunity and not be prepared . 

    Les Brown

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