How are you responding to price cuts?

[Zachary Inman]

Hey BP!

My home market is Indianapolis, Indiana, and I'm seeing many price reductions following the continued increase of rates — which comes as a surprise to no one. I'm prowling the market for good opportunities, as always, but can't help but think that it might be best to hold off for a bit to see some more normalization. True, the cost of money will rise, but I can't help but think it'd be a less turbulent acquisition environment in a few months or so.

Two questions for you all: 

1. How significantly are rate hikes affecting your market?

2. What is your short-medium term strategy in the current environment?

[Matt Bishop]

@Zachary Inman, I'm holding steady in Dallas, Texas. I have almost no debt on 13 SFH rentals and one commercial built. Rents are up and still rising. If price go down, I would buy more.. Otherwise I will maintain the same course I've been operating for 25 years.

[Caleb Brown]

Quote from @Zachary Inman:

Quote from @Caleb Brown:

We have seen DOM creep up to 20-30 days. Overall KC is stable compared to other markets that have exploded(Utah, Nevada, Idaho, etc). We saw a 10-15% price increase (year over year) over the last couple years so it is expected for things to calm/drop. When looking for deals I try to discount the ARV 5-10%. The good thing about the current market is on the buy side you can be aggressive. For deals sub 200K we are offering 5-20K under asking

Finding success by being bolder with offers? I've had mixed results. Some sellers still think it's the same market it was 6mo ago

There are still some sellers that want way too much. It's just a numbers game, there a many motivated sellers wanting to go under contract before November/December