And is there something I could do differently next time to avoid situations like this - one thing I am thinking is not to speak directly to the seller again, as I did not anticipate an irrational person on the other side of the phone.

However, I'm afraid it could bait good tenants into leaving early, especially in the winter months (probably an irrational fear).

Put in your head an ARM with a short fixed term at an interest rate that would be on the higher side if it were on a 30 year fixed -- the message is clear, they want you out of that and into a 30 year fixed in less than X years, and they don't want you being in a portfolio ARM (that can't be sold to fannie/freddie, meaning the lender is simply out that money lent to you until you refinance) to feel like it's saving you any money.You need to be very careful with your loan contingency when using such financing, however, as yes/no decisions can feel very arbitrary and irrational.

This means an IRR at 20% or higher at the asset level.

That said, in times of high rate of change in prices (steep inflation, steep deflation), there is an added element that isn't accounted for in classical economics -- irrational behavior.

What happened to the saying "the market can stay irrational longer than we can stay solvent?"

Ten years is still too fresh for that kind of irrationality, but I'm sensing a bit of it.  

I may seem a bit irrational to my family and friends who don't understand the financial freedom that real estate provides, but I know like you know, like we know.

While it only truly cash flow $200/ month (500 after piti), my irr at 1 year to 5 years is very high from the equity.

      By way of background, I've bought 8 SFRs in the last 18 months, 4 with conventional loans and the other 4 in cash.  These properties are worth approx. $2.5mil, and I owe less then $700k  on the mortgages, so net...