chasing the market

[Mike R.]

hi,

curious to hear what some long term investors think with respect to when to say no to chasing ever increasing prices.  

 The pacific northwest (particularly Seattle area) has seen a huge increase in the price of homes and multi-family properties (as well as rents).  increasingly i am seeing multiple bids on a property and agents calling for "highest and best offers", etc.  we recently lost out on a prop when 3 additional bidders came in and someone paid full price.   Full price on a place that needed a new roof immediately, new electrical panels immediately, possible need to re-wire the entire place and finally one of the units hadn't been updated in nearly 15 years.  The cap rate at current rents was something near 5.75%-6% and cash on cash was not attractive either given the $ needed to spend on the first day, etc.  i realize the northwest is a growth area of the country but when do investors say enough and step away from the market.