Should I take my money out of the stock market and invest in RE?

[David Zeek]

I have approx 20k in the stock market and am just starting out in RE investing. Historically, the stock market can give a 7% return per year. I think a cash on cash return of 10-13% is typical for real estate investors (pending area, investment opportunities, etc), which seems like a no brainer (take the money out!).

Should I keep my money in the stock market to broaden my portfolio or take the money out and use it for a down payment for another investment property?

[Jody Sperling]

Welcome! Looks like your first post on BP. It's a great community.

We use the stock market to grow our money between investment properties, knowing that real estate is our primary vehicle to build wealth. 

One well-purchased single family home will spin off a lifetime of cash flow while the tenants occupying it, will pay down a mortgage. And in many (but not all) situations, you'll also enjoy property appreciation. Lastly, unlike the stock market, real estate can be depreciated for tax savings.

We currently have $3,500 in high-risk/high-reward stocks, and pull 10% of all gains out as debt paydown. When we find our next investment property, we'll pull the stock market money and use it for the home purchase.

But no matter what you do, as long as you invest diligently, you're ahead of many people, who never seriously begin their wealth building journey. Best of luck!