He’s selling everything else and concentrates on these 6 24/7 gateway cities.
Here is the latest financials
Growing rate hike market, it is tough to judge REITs as it depends on what the loan they have got. Normally, they used to get term loan 5 years for higher profitability. It is hard to visualize the future after 5 years.
Like assume we have a property which has 7 year arm at 3.25% which may increase 2% cap rate after 7 years, changeable every year with max cap rate of 10.5%. If we are 5% negative cash flow with rent now, what will be my future cash flow, profitability and growth (4%)?
In such case, the best option is to sell right now when market is good as the lock is ARM. If the same is locked low rate fixed mortgage at 3.625%, hold forever.
He is doing that exactly now.