{"id":111944,"date":"2020-03-29T15:00:55","date_gmt":"2020-03-29T21:00:55","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=111944"},"modified":"2024-01-05T11:26:59","modified_gmt":"2024-01-05T18:26:59","slug":"figure-pull-money-real-estate-market","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/figure-pull-money-real-estate-market","title":{"rendered":"Should You Pull Your Money Out of the Real Estate Market?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Today I\u2019m talking about how to figure out when it\u2019s a good time to pull your money out of the real estate market.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">OK, guys, you heard it here first. The Real Estate Dingo is telling you that you need to pull your money out. This is why.<\/span><\/p>\n<h2>Should You Pull Your Money Out of the Market?<\/h2>\n<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/jV_zWqZy6iM\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\" data-mce-fragment=\"1\"><\/iframe><\/p>\n<p><span style=\"font-weight: 400;\">A little over a month ago, if you looked at the real estate markets across the country, they had surpassed the peaks of 2005 and 2006. A month or so ago, if you looked at the stock market and <a href=\"https:\/\/www.investopedia.com\/ask\/answers\/100214\/what-dow-jones-industrial-average-djia-alltime-high.asp\" target=\"_blank\" rel=\"noopener noreferrer\">Dow Jones Industrial Average<\/a> and <a href=\"https:\/\/www.nasdaq.com\/articles\/the-dow-just-hit-a-record-high.-its-about-time.-2020-02-12\" target=\"_blank\" rel=\"noopener noreferrer\">a lot of other indexes across the world<\/a>, they were at all-time highs. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">After being in real estate and an entrepreneur running various companies for the last 10 years, I haven\u2019t really lived through a market cycle or recession\u2014but <a href=\"https:\/\/www.forbes.com\/sites\/simonmoore\/2020\/03\/28\/why-the-us-is-now-in-recession\/#400b566ba5ef\" target=\"_blank\" rel=\"noopener noreferrer\">it seems that&#8217;s about to change<\/a>. I was still pretty young and inexperienced in 2008 and 2009. But I am smart enough to have smarter people around me who are \u201cold-timers\u201d when it comes to investing. <\/span><\/p>\n<p><strong><em>Related: <\/em><\/strong><em><a href=\"https:\/\/www.biggerpockets.com\/blog\/10-ways-recessions-impact-real-estate-how-to-prepare\" target=\"_blank\" rel=\"noopener noreferrer\">10 Ways Recessions Impact Real Estate (&amp; How to Dodge the Worst of It)<\/a><\/em><\/p>\n<p><span style=\"font-weight: 400;\">A lot of these individuals told me that every 10 years or so is when we have a dip or when a recession hits. Real estate prices tend to go down, the stock market also tends to go down, and everyone\u2019s in fear and panic. Then, the market plunges even further.<\/span><\/p>\n<p>In this instance, the coronavirus\/COVID-19 pandemic is exacerbating that fear and panic.<\/p>\n<p><span style=\"font-weight: 400;\">Look, we&#8217;ve really had a pretty good run. If you look at the last 10 years, a lot of investors who I talk to on a daily basis are telling me that they\u2019ve made a lot of money in the stock market. A lot them are pulling money out of their <a href=\"https:\/\/www.biggerpockets.com\/blog\/home-equity-loan-grow-real-estate-portfolio\" target=\"_blank\" rel=\"noopener noreferrer\">home equity line of credit<\/a> because they\u2019ve made a large capital appreciation or equity gain in their personal residence or other investment properties. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">So, this has started to become a pretty common topic that I\u2019m hearing. A lot of folks have done really well and made a lot of money. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">In my opinion, what you should do when you\u2019re on top of the hill is take some money off the table. Sell a few properties and sell out of your stocks. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">I\u2019m a big believer in cash. I love cash. Cash is king, and cash flow is queen. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the current market conditions and circumstances, I don\u2019t think there is anything wrong with liquidating out of investment properties in markets that have already appreciated.<\/span><\/p>\n<p><strong><em>Related:<\/em><\/strong><em> <a href=\"https:\/\/www.biggerpockets.com\/blog\/preparing-financial-independence-preparing-recession\" target=\"_blank\" rel=\"noopener noreferrer\">5 Tips to Survive a Coronavirus-Induced Recession (&amp; Thrive Afterward)<\/a><\/em><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-105340\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/01\/stock-market-crash.jpg\" alt=\"red down arrow on black and white grid indicating stock loss\" width=\"702\" height=\"336\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/01\/stock-market-crash.jpg 702w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/01\/stock-market-crash-300x144.jpg 300w\" sizes=\"auto, (max-width: 702px) 100vw, 702px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">So pay your capital gains taxes, pay your taxes, and park your money in a very conservative money market account and just sit on it. You know why, guys? Because when the market plunges further and you have the cash to jump in, you\u2019re going to make so much more money. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are going to be people who are fearful, who are desperate, and who want to sell out, making it easier for you to get better deals and negotiate harder. Just remember cash is king. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">I think that taking that route is better than maybe waiting for another year or two to try to make more money. If you are happy with where you are right now and how much you have profited or gained, take the money off the table and sit on cash. There\u2019s always going to be a deal around the corner.<\/span><\/p>\n<p><em><strong>Related: <\/strong><\/em><em><a href=\"https:\/\/www.biggerpockets.com\/blog\/real-estate-stock-market-investing-differences\" target=\"_blank\" rel=\"noopener noreferrer\">Should Real Estate Investors Sleep Soundly Despite Stock Market Scaries?<\/a><\/em><\/p>\n<p><span style=\"font-weight: 400;\">Here in the Midwest, we feel like kids in a candy store. I\u2019m not the only one who\u2019s going to tell you this. There are a lot of other operators like myself who will say they\u2019re doing well in the Midwest because of the deals and opportunities. The cash flow makes sense, and the profit margins are good. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">So keep that in mind. There are markets out there that still haven\u2019t recovered, there\u2019s still a lot of foreclosures, there\u2019s still a lot of opportunities. And maybe consider using your capital to get in some of these markets here in the Midwest. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Once again, I don\u2019t think you could go wrong selling out right now. I said it first: keep the cash and wait. Then, go all-in once you have seen the market has gone as far down as it can go. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">So that\u2019s it! Take it for what it is. <\/span><\/p>\n<p><a href=\"https:\/\/www.biggerpockets.com\/webinars\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-91217\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-01.jpg\" alt=\"\" width=\"700\" height=\"85\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-01.jpg 700w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-01-300x36.jpg 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/a><\/p>\n<p><em>Do you believe we&#8217;re headed toward a recession? If so, what are you doing to prepare?<\/em><\/p>\n<p><span style=\"font-weight: 400;\"><strong>I\u2019d love to hear from you in a comment below.<\/strong> <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Today I\u2019m talking about how to figure out when it\u2019s a good time to pull your money out of the real estate market. I&#8217;m going to be perfectly transparent: I think the time is now! Let me explain why that&#8217;s the case. <\/p>\n","protected":false},"author":1672,"featured_media":115059,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7399],"tags":[],"class_list":["post-111944","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-diversifying-investments"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/111944","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/1672"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=111944"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/111944\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/115059"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=111944"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=111944"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=111944"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}