Most apartment markets are near the peak -- buyer beware

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I'm just posting this as a warning for newbies.  Obviously, no one can predict the future and no one knows what's going to happen next year, the year after, etc.  But most apartment markets are at or near the peak in pricing for this cycle.  The apartment market cycle is not something that is discussed much on this forum, and I've been seeing a lot of posts about buying apartment buildings with little money and then having loans with a balloon payment in 1, 2 or 3 years down the road.  

It's really great that people are taking action and buying, but please please please be running sensitivity analyses on your exit strategy.  Don't assume rents will be higher in 3 years, values will be higher in 3 years, cap rates lower, etc.  Ask yourself, what is my exit strategy to deal with my balloon payment if interest rates are 2% higher and cap rates are as well?  Please understand what that does to the value of your building and plan accordingly.

Not trying to be doom and gloom, and hopefully the market continues to boom and rates stay low, but I'm seeing so many new buyers enter the market with little to no experience, no discussion at all about the cycles and most have these balloon payments.