Should I sell out? High equity low cash flow environment.

[Toben B.]

I live and own in a secondary market that has seen a crazy run up. Houses are getting multiple offers $20-25K over asking. I also own a small apartment complex in a tertiary market. 

RE here seems to be at red hot nose bleed levels. I am seeing prices that will not make a return for years and appear to be disconnected from reality. 

I called a broker to see if he was seeing what I am seeing. He said he has an property under contract at a 1 cap and sees 4 caps in the tertiary market. 

Ideally I should have refinanced and cashed out a few months ago, but I missed that window.

Are you seeing what I am seeing or does everyone think rents will keep going up 20% a year?

I am getting tempted to sell it all and walk away for a few years or at least until sales prices and profits start to make sense again. 

I think I can get a 300% return on my apartments and 400% on my houses.  I bought cheap and held after the last crash so I have tons of equity but not that much cash flow. 

What are you seeing in your markets?

[Greg Scott]

The market has been ludicrously hot in the apartment space, partly because buyers are assuming rents will continue to go up at 20% per year, which is unlikely given the Fed tightening. 

Some of the heat is already starting to come out of the market and I've seen a few deals, priced aggressively, struggle to attract buyers.

That said, we remain in acquisition mode for the right deal. We are just having to kiss a lot more frogs to find the prince.