Investing while market is high

Multi-Family and Apartment Investing
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Investing while market is high

Jazzy Schaeffner
Rental Property Investor · South Bend, IN · Member since 2018 · 3 posts · 0 votes

I'm looking to buy my first Duplex within the few couple months with an FHA loan. The market is high right now and when buying a property it will eventually go back down in price, meaning I lose money. What are you doing right now while the market is high? Ive read the BRRR strategy is a good option at the moment. Any advice would be much appreciated! :)

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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
7y

At nearly every point in history housing is at an all time high.

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  • Jacob Sampson
    Investor · Topeka, KS · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    For me the deals have to be above average for me to buy.  Otherwise, I am accumulating cash in order to take advantage of the inevitable dip, in the next year or 3.  I know as a new investor sometimes you just want to get a deal under your belt but I would not buy into a hot market.  You likely won't get much cash flow and also won't get much appreciation for the reason that you stated.  

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  • James Mc Ree
    Rental Property Investor · Malvern, PA · Member since 2016 · 1k+ posts · 939 votes
    7y

    I agree with @Jacob Sampson.  Take your time and look at a lot of properties.  It makes no financial sense to buy the best deal available in the next month or so if you think you are going to lose money on in over the next several years.  Watch for properties in late Fall and the Winter if you don't see something you like in the near term.  Sellers sometimes get panicky and lower their asking prices and will take lower offers to avoid carrying the property over the Winter.

    Consider dropping some letters off in your target market asking if someone is looking to sell before the end of the year.  You can use that over-Winter fear as part of your sales pitch (Winter heating costs, insurance, taxes).  You won't get much of a response rate; maybe none, but you only need 1 good one.  An off-market deal can be the best deal of all.

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    7y

    At nearly every point in history housing is at an all time high.

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group545 Reviews
    WebsiteView Page
    2Reply
  • Tj Hines
    Specialist · Tampa, FL · Member since 2012 · 933 posts · 492 votes
    7y

    @Jazzy Schaeffner, whatever you decide to do in this market be sure to buy for strong cash flow day one. Not appreciation. Also what would give you an extra layer is purchasing the property under market value. Giving you the opportunity to increase the rents through value add. 

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  • Michael Ablan
    Real Estate Broker · Watertown, NY · Member since 2016 · 1k+ posts · 1k+ votes
    7y

    @Jazzy Schaeffner -  I invest in a market that stays stable regardless of the conditions of the market.  I don't get the perks of appreciation, but I also don't run the risk of price corrections.  It's a great area to start out and build a small empire.

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  • Michael Ealy
    Developer · Cincinnati, OH · Member since 2018 · 1k+ posts · 3k+ votes
    7y
    Originally posted by @Jazzy Schaeffner:

    I'm looking to buy my first Duplex within the few couple months with an FHA loan. The market is high right now and when buying a property it will eventually go back down in price, meaning I lose money. What are you doing right now while the market is high? Ive read the BRRR strategy is a good option at the moment. Any advice would be much appreciated! :)

     Jazzy,

    The true real estate investors don't buy at market value. They do the work to:

    1. Find properties that are selling BELOW market; and/or

    2. Find properties they can FORCE the value to go up by doing property/income improvements

    So yes, you can actually make money even in a market that is HOT by not just buying any deal out there. I've been investing since 1999. Lost everything in the early 2000s but acquired over 1,000 apartment units since. So I know how to make money in real estate when the market is down and even when the market is up.

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