[quote=bearishgurl]
livinincali, I disagree that free-and-clear RE owners are “weaker hands.”

It doesn’t matter that these “investors” were/are seeking yield. If it is not a good time to sell, they don’t have to. If rates go up, they can continue to rent their propertie(s) out in lieu of investing in in something more passive. I just don’t see CD’s, MM’s and bond yields going so high as to rival rental income from an investment property purchased right and with all cash.

“Traditional owner occupiers” didn’t buy to “make the numbers work.” They bought what they liked where they personally wanted to live (within the confines of their qualifications).[/quote]

I honestly doubt most of the investor speculators are actually free and clear. Hedge funds and sophisticated investors tend to use leverage. They showed up with cash when they made the deal but I’d bet in a lot of cases they used those assets as collateral for more borrowing.

There’s some out there that are truly free and clear but I’d guess that it doesn’t represent most and certainly doesn’t prevent them from cash out refinancing at some point. If they end up with a bad experience dealing with tenants do they stay there when other yield investments start being more competitive. Maybe, I don’t know. I just feel like the emotional attachment isn’t there. People have drained retirement accounts to keep an owner occupied home. An investor probably has some kind of risk tolerance where they are prepared to exit even if it means a principal loss.

Just like there’s a flurry to get in right now there’s potentially a flurry to get out at some point down the road. Don’t be in the position of having to compete with them to sell at that point. I suppose you could hope that the bigger players unload in bulk sales that don’t hit the open market. I.e. hey CalPRES please be the bag holder for this short term leveraged investment we made.