Do you plan on eventually cashing out and moving away from real estate?

Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes

Or have you?

A woman I recently dated also has a rental portfolio and retired in her 30's. She met a lady in California who told her as you get older you won't want to deal with the hassle of tenants and rentals or PM's, and you'll want to sell like I did. I agreed with her and so did the girl I was dating for a few months at that time.

So that begs the question, do any of you have an exit plan? Opportunity zones? 1031 into DST? What?

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Glen Wiley

Investor · Richmond, VA · Member since 2023 · 459 posts · 474 votes

I will be retiring from my w2 job in a few years and plan on using the SFH rentals as a way to stay busy without being too busy. My wife and I love real estate and I enjoy the maintenance since I like working with my hands,

We realize that we are going to have to do something to shed assets eventually simply because I am not interested in dying with a super high net worth but we won't be selling because we want to.

After 20 years of landlording I can honestly say that I love providing good homes to good people. I love how we help families, I love the game of buying houses, I love fixing them up and seeing the results....why sell?

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Nathan M kiefer
Rental Property Investor · south carolina and michigan · Member since 2023 · 348 posts · 226 votes
2y
I think 99.99% of people sell because of leverage(or overleverage) or they think the "market is up".
We sold one when we were young(yep young and dumb) because I could make $50k, the market went on a tear after that we missed out on a lot of money.
Our goal is to keep and hold minimizing or eliminating any debt and enjoy the cashflow and re tax write offs.
we have 19, had 20 and regretted almost instantly selling the one.
2 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @Jay Hinrichs:

Quote from @Carlos Ptriawan:

Quote from @Jack B.:

Or have you?
A woman I recently dated also has a rental portfolio and retired in her 30's. She met a lady in California who told her as you get older you won't want to deal with the hassle of tenants and rentals or PM's, and you'll want to sell like I did. I agreed with her and so did the girl I was dating for a few months at that time.
So that begs the question, do any of you have an exit plan? Opportunity zones? 1031 into DST? What?

btw i want to bring another point, but the conclusion is the reverse, and this is especially true for Californian.

once we pass certain age, we no longer having w2 but we want to maintain certain lifestyle, correct ? to do that it seems the answer is having to keep the property and make sure DSCR is above one so everything is covered by tenant. Other alternative is to move to cheaper area (CA->TX or bay area->sacramento/vegas) ; but that would reduce my cash position!

If I am 82 with main SF still in CA, I could still live here if I maintain the same DSCR. If I have to buy cash in vegas and retired there, that's great too, but why move if asset is still appreciating and everything is still covered by tenant. Lets say I have half mil now, If I move to vegas I purchased 300k, now my cash position is 200k. But if I keep primary in CA with DSCR 1, I can keep my half million intact. And that half million is producing at least 5%.
So it seems mathmatically speaking, consolidating and maintain property locally is the key here. If I have DSCR>1 I dont have to move/sell. It seems the older we are we have to maintain (never sell) certain property because it creates an indirect saving...

vegas is not that cheap anymore.. 300k is OK but in my mind not the greatest I think more like 500k to 750k is what you need to find a decent place in vegas.

see that doesn't even make sense financially, it seems it's more viable to stay local with DSCR 1 or if want to leave to save money, just leave the country for good.
Costa Rica LOL :-)
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
2y
Quote from @Bill B.:

@Carlos Ptriawan

I bought one property in 1999 but then nothing until I bought 7 from April 2009 to April 2012. (I bought a new primary and a rental each year plus a deal I wanted for a future retirement home.)Then a couple more in 2015. This year I exchanged the 1999 property for a new build. Which could always become my new primary if it doesn’t work out as a rental.

ABSOLUTE impeccable timing !!!!
Podcast Guest on Show #222
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2 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
2y
Quote from @Carlos Ptriawan:

Quote from @Jay Hinrichs:

Quote from @Carlos Ptriawan:

Quote from @Jack B.:

Or have you?
A woman I recently dated also has a rental portfolio and retired in her 30's. She met a lady in California who told her as you get older you won't want to deal with the hassle of tenants and rentals or PM's, and you'll want to sell like I did. I agreed with her and so did the girl I was dating for a few months at that time.
So that begs the question, do any of you have an exit plan? Opportunity zones? 1031 into DST? What?

btw i want to bring another point, but the conclusion is the reverse, and this is especially true for Californian.

once we pass certain age, we no longer having w2 but we want to maintain certain lifestyle, correct ? to do that it seems the answer is having to keep the property and make sure DSCR is above one so everything is covered by tenant. Other alternative is to move to cheaper area (CA->TX or bay area->sacramento/vegas) ; but that would reduce my cash position!

If I am 82 with main SF still in CA, I could still live here if I maintain the same DSCR. If I have to buy cash in vegas and retired there, that's great too, but why move if asset is still appreciating and everything is still covered by tenant. Lets say I have half mil now, If I move to vegas I purchased 300k, now my cash position is 200k. But if I keep primary in CA with DSCR 1, I can keep my half million intact. And that half million is producing at least 5%.
So it seems mathmatically speaking, consolidating and maintain property locally is the key here. If I have DSCR>1 I dont have to move/sell. It seems the older we are we have to maintain (never sell) certain property because it creates an indirect saving...

vegas is not that cheap anymore.. 300k is OK but in my mind not the greatest I think more like 500k to 750k is what you need to find a decent place in vegas.

see that doesn't even make sense financially, it seems it's more viable to stay local with DSCR 1 or if want to leave to save money, just leave the country for good.
Costa Rica LOL :-)

Portugal and join Clayton Morris he was the smartest guy in the room his strategy of basically stealing millions and decamping to Portugal were the cost of living is lower .. and much safer and better health care than any thing south of the border Plus all of Europe at your beck and call.
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
2 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @Jay Hinrichs:

Quote from @Carlos Ptriawan:

Quote from @Jay Hinrichs:

Quote from @Carlos Ptriawan:

Quote from @Jack B.:

Or have you?
A woman I recently dated also has a rental portfolio and retired in her 30's. She met a lady in California who told her as you get older you won't want to deal with the hassle of tenants and rentals or PM's, and you'll want to sell like I did. I agreed with her and so did the girl I was dating for a few months at that time.
So that begs the question, do any of you have an exit plan? Opportunity zones? 1031 into DST? What?

btw i want to bring another point, but the conclusion is the reverse, and this is especially true for Californian.

once we pass certain age, we no longer having w2 but we want to maintain certain lifestyle, correct ? to do that it seems the answer is having to keep the property and make sure DSCR is above one so everything is covered by tenant. Other alternative is to move to cheaper area (CA->TX or bay area->sacramento/vegas) ; but that would reduce my cash position!

If I am 82 with main SF still in CA, I could still live here if I maintain the same DSCR. If I have to buy cash in vegas and retired there, that's great too, but why move if asset is still appreciating and everything is still covered by tenant. Lets say I have half mil now, If I move to vegas I purchased 300k, now my cash position is 200k. But if I keep primary in CA with DSCR 1, I can keep my half million intact. And that half million is producing at least 5%.
So it seems mathmatically speaking, consolidating and maintain property locally is the key here. If I have DSCR>1 I dont have to move/sell. It seems the older we are we have to maintain (never sell) certain property because it creates an indirect saving...

vegas is not that cheap anymore.. 300k is OK but in my mind not the greatest I think more like 500k to 750k is what you need to find a decent place in vegas.

see that doesn't even make sense financially, it seems it's more viable to stay local with DSCR 1 or if want to leave to save money, just leave the country for good.
Costa Rica LOL :-)

Portugal and join Clayton Morris he was the smartest guy in the room his strategy of basically stealing millions and decamping to Portugal were the cost of living is lower .. and much safer and better health care than any thing south of the border Plus all of Europe at your beck and call.

HAHA lol he should move to Belize following Mcafee .....
0 Reply
Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
2y
@Jack B.
seems like a worthwhile question. my answer: probably not. i don't invest only in RE either. maybe sell off the lower performers and keep the best ones but that would be it.
4 Reply
Bud Gaffney
Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
2y
HELL NO !
0 Reply
Bud Gaffney
Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
2y
Mix of 50 rental units right now. I'll never sell any of them. Only add :)
0 Reply
Account Closed
Rental Property Investor · New Braunfels, TX · Member since 2022 · 409 posts · 408 votes
2y
@Jack B. My favorite motto is NFS! We live in an area that has been growing and growing for the last 41 years that I’ve lived here. The duplex that we built 4 years ago has already paid for itself in rents and appreciation. No way I’m getting rid of any of the golden geese. Proverbs 13:22💕

3 Reply
Joe S.Pro Member
Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
2y
I have asked myself the same question. I have read through the replies with extreme interest.
The goal is to not run out of income before you run out of life. Ideally, we live a long time. :)
3 Reply
Leo Young
Boston/NYC · Member since 2019 · 7 posts · 5 votes
2y
No, the plan is to "buy and die", because the tax code in the US incentivizes this the most.
If you scale up to a point that it's too much hassle, then hire out someone to help, a property manager or even an asset manager.
1 Reply
Henry ClarkPro Member
Developer · Member since 2020 · 4k+ posts · 4k+ votes
2y
OP
Retirement- I retired from my W2 8 years ago. My wife 4 years ago. would we sale our REI investments? We don't do SFH or MFH asset class. Self storage, country subdivision lots (not houses), next May flex contractor buildings and Teak Belize plantations 225 acres.
1. Having watched my mother and father age, by age 80 I want no responsibilities even with managed assets. We have trusts to get rid of all of our wealth.
2. Our son we will help if he wants but won’t get the majority of our wealth. But with the funds we give him, if he wants we can guide him down the same paths. He could have 10 Times the wealth we have today in 15 years. He could just read my BP posts.
3. Teak is normally a 20 year or longer play. I will be past 80 by then. This is the only time we have taken on a “partner” in any investments. He is 20 years younger than me, thus will outlive the initial harvest. Was worth about $3,000 when we first met. By the end of this venture he will be worth more than the 90% of all US individuals while living in Belize. He has skin in the game and will guard it with his life. Our value will go to my wife or son if he wants it.
4. Country subdivisions are cash snow ball type investments. Not long term plays. Thus they get sold to the market. Our retirement is not dependent on them.
Forgetting retirement, would we ever sale? We sold a Golden Goose self storage location two years ago. Was feeling uneasy with the economy and wanted more cash to scale and to reduce debt. This new location had both tremendous immediate equity and cashflow $40k per month before P/I. We paid down debt and also bought two pieces of land so we can scale back with an even better Golden Goose location. Or sale this great location.

So I would sale to scale, reduce LTV % risk, and to prune upwards our portfolio.
My worst investment and smallest is my first investment. Unfortunately I’m emotionally tied to it since it taught me the most I have learned good and bad.
Another reason I would sale is based on our "current" risk reward level. To me I am not REI investing without leverage. So having say 10 properties cash flowing $xx,xxx doesn't fit our model. So I would borrow against those properties to buy more. Or sale off our low performing assets from a cashflow, value add or potential appreciation.
You don't have to wait to retire from REI to enjoy REI.
Italy still has the best gelato.
Italy has some of the greatest tree lined road ways. The mansion at the end of the road is for sale.
You could go wine tasting every day of the week while still doing REI.
Munich has some of the greatest beer and ham shanks in the world.

Belize has some of the greatest weather. Doing REI while building a fish pond in the middle of winter.
So no you don't have to sale REI to retire. If your a skier, deep sea fished, golfer, etc you can do it while doing REI.
6 Reply
Jeff S.
Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
2y
@Jack B.I am right where I want to be and will stay there until something prompts me to change. I have no desire at this time to buy or sell while tenants are good and doing renovation simply has no appeal to me. I am focusing on enjoying life and don't mind entering a few numbers in my quickbooks account.
3 Reply
K S.
Member since 2021 · 401 posts · 254 votes
2y
Quote from @Carlos Ptriawan:

Quote from @Bill B.:

@K S.

$20k/mo far exceeds my expenses already.
when did you make your first purchase ? KS and Bill ?

Ok I thought Bill meant 20k/year not per month which is more than enough to retire but to put things into perspective, accoridng to the historical S&P 500 calculator, I could have acheived the same results as Bill with just $1M invested 16 years ago. Pulling just 5%/year of the 5M today is around 20k/month (and would still increase in value). That would net me aproximately the same cashflow as Bill but for absolutely zero time in. Despite the nuiances, I prefer the latter which is why I'm stopping at 10 properties after this build and will sell off some in retirement as streamlining your life becomes more important. I don't find it "fun" as others say to rent out houses you've never seen and will never live or vacation in. I would get rid of the rest and convert them into a steady income streams. Diversification is better anyways and some investments like your 401k can't be taken in a lawsuit.

I have plenty of colleagues that retired and soon to retire off their 401k and other market investments with millions at the same age as you guys but without the tenants, mortgages, lawsuites, maintenance, always searching, offering, closing and renovating, cpa headaches etc.
4 Reply
K S.
Member since 2021 · 401 posts · 254 votes
2y
Quote from @Shiloh Lundahl:

For me real estate is fun, but it is a means to an end. I like really estate because it gets me the things that I really like and enjoy such as my own home, my cabins in the Mountains in Lakeside, Arizona and the 3 large, super properties that I have in Costa Rica that I rent out as vacation rentals. I used real estate as a vehicle to acquire these things.
What zip codes in lakeside would you prefer to buy land to build on? I was just over there looking around.
0 Reply
Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
2y
Quote from @K S.:

Quote from @Carlos Ptriawan:

Quote from @Bill B.:

@K S.

$20k/mo far exceeds my expenses already.
when did you make your first purchase ? KS and Bill ?

Ok I thought Bill meant 20k/year not per month which is more than enough to retire but to put things into perspective, accoridng to the historical S&P 500 calculator, I could have acheived the same results as Bill with just $1M invested 16 years ago. Pulling just 5%/year of the 5M today is around 20k/month (and would still increase in value). That would net me aproximately the same cashflow as Bill but for absolutely zero time in. Despite the nuiances, I prefer the latter which is why I'm stopping at 10 properties after this build and will sell off some in retirement as streamlining your life becomes more important. I don't find it "fun" as others say to rent out houses you've never seen and will never live in which is why just owning your primary and vacation homes makes more sense in retirement. I would get rid of the rest and convert them into a steady income streams. Diversification is better anyways and some investments like your 401k can't be taken in a lawsuit.

I know that this is a RE forum so theirs a bias against other investments but I have plenty of colleagues that retired and soon to retire off their 401k and other market investments with millions at the same age as you guys but without the tenants, mortgages, lawsuites, maintenance, always searching, offering, closing and renovating, cpa headaches etc. I'm just saying for people reading that are like me whose primary focus is on a real job, then you can acheive the same goals as the average RE investor by investing in the market.

@Bill B.is in the top 5% of earners in the country and a great contributor to the forums. While others "could've and should've", Bill went out and did it. Let's save the hate for the bad people.
2 Reply
K S.
Member since 2021 · 401 posts · 254 votes
2y
Quote from @Mike Dymski:

Quote from @K S.:

Quote from @Carlos Ptriawan:

Quote from @Bill B.:

@K S.

$20k/mo far exceeds my expenses already.
when did you make your first purchase ? KS and Bill ?

Ok I thought Bill meant 20k/year not per month which is more than enough to retire but to put things into perspective, accoridng to the historical S&P 500 calculator, I could have acheived the same results as Bill with just $1M invested 16 years ago. Pulling just 5%/year of the 5M today is around 20k/month (and would still increase in value). That would net me aproximately the same cashflow as Bill but for absolutely zero time in. Despite the nuiances, I prefer the latter which is why I'm stopping at 10 properties after this build and will sell off some in retirement as streamlining your life becomes more important. I don't find it "fun" as others say to rent out houses you've never seen and will never live in which is why just owning your primary and vacation homes makes more sense in retirement. I would get rid of the rest and convert them into a steady income streams. Diversification is better anyways and some investments like your 401k can't be taken in a lawsuit.

I know that this is a RE forum so theirs a bias against other investments but I have plenty of colleagues that retired and soon to retire off their 401k and other market investments with millions at the same age as you guys but without the tenants, mortgages, lawsuites, maintenance, always searching, offering, closing and renovating, cpa headaches etc. I'm just saying for people reading that are like me whose primary focus is on a real job, then you can acheive the same goals as the average RE investor by investing in the market.

@Bill B.is in the top 5% of earners in the country and a great contributor to the forums. While others "could've and should've", Bill went out and did it. Let's save the hate for the bad people.

I don't get it, who'se hating? Please quote where someone hated on bill. I think all of us here went out and "did it" as you stated so I don't know who you're referring to.
I'm simplyusing Bill as an example to provec to the OP that you can sell your assets in retirement and produce the same cashflow in the market pulling 4-5% which is a standard retirement pull plus some retirement accounts can't be taken away in a lawsuit. I find that to be better than renting out an empire of homes that you've never seen, will never live in or vacation in. If you have something better to contribute then that, then I'd like to hear it.

3 Reply
Eric W.
Investor · WI · Member since 2015 · 16 posts · 11 votes
2y
Quote from @K S.:

Quote from @Jack B.:

Or have you?
A woman I recently dated also has a rental portfolio and retired in her 30's. She met a lady in California who told her as you get older you won't want to deal with the hassle of tenants and rentals or PM's, and you'll want to sell like I did. I agreed with her and so did the girl I was dating for a few months at that time.
So that begs the question, do any of you have an exit plan? Opportunity zones? 1031 into DST? What?

I like the idea of living off cashflow from free and clear properties or 120k/year with as few properties as possible. One of my free and clear condos alone cashflows as much as people with 12-24 financed properties. Why have a huge net worth in retirement when your cashflow is so little and you're not selling? To make your kids rich lol.

In my opinion Jack, I would pay off enough properties to cashflow enough to match or exceed your expenses and invest the rest in 401k, the S&P 500, Immediate Annuities, dividens or whatever. Too many mortgages into retirement means your multiplying your risk and headaches for what a tiny cashflow?. One poster just claimed 5 million in net worth generating only 20k net income into retirement. I would sell at that point and pay off the newer homes so I can cashflow from my equity instead of dying with debt.

Consider a SFH alone only lasts 50-100 years. My 40 year old SFH already had 30k-50k in renovation costs just to get the rents to market value because homes age. I purchased in 2006 but the home still returns the same despite the rents doubling due to the age, property taxes and maintenance. You'll also need to rotate all 24 properties at some point (27 years) in order to restart your depreciation. With changing times, you might find C neighborhoods become ghetto. No sense in rotating them for newer homes so I can die with a bunch of 30 year mortgages and little cashflow. Maybe this makes sense to those posters above but not for me.

Treat DST like the new timeshare lol. One would have to describe why it's safer than a CD, Bond, Annuity (which is federally insured) or just the S&P 500. They can't, which is why they just post a link and disappear.

Can you really "restart depreciation "? The only thing you can do to get some ongoing depreciation is to trade into higher basis or just buy additional properties. The idea of just rotating properties does nothing to accomplish this, as the zero basis will have to be dealt with, either pay the full capital gain, or 1031 and restart the new acquisition with an adjusted (reduced) basis.
0 Reply
K S.
Member since 2021 · 401 posts · 254 votes
2y
Quote from @Eric W.:

Quote from @K S.:

Quote from @Jack B.:

Or have you?
A woman I recently dated also has a rental portfolio and retired in her 30's. She met a lady in California who told her as you get older you won't want to deal with the hassle of tenants and rentals or PM's, and you'll want to sell like I did. I agreed with her and so did the girl I was dating for a few months at that time.
So that begs the question, do any of you have an exit plan? Opportunity zones? 1031 into DST? What?

I like the idea of living off cashflow from free and clear properties or 120k/year with as few properties as possible. One of my free and clear condos alone cashflows as much as people with 12-24 financed properties. Why have a huge net worth in retirement when your cashflow is so little and you're not selling? To make your kids rich lol.

In my opinion Jack, I would pay off enough properties to cashflow enough to match or exceed your expenses and invest the rest in 401k, the S&P 500, Immediate Annuities, dividens or whatever. Too many mortgages into retirement means your multiplying your risk and headaches for what a tiny cashflow?. One poster just claimed 5 million in net worth generating only 20k net income into retirement. I would sell at that point and pay off the newer homes so I can cashflow from my equity instead of dying with debt.

Consider a SFH alone only lasts 50-100 years. My 40 year old SFH already had 30k-50k in renovation costs just to get the rents to market value because homes age. I purchased in 2006 but the home still returns the same despite the rents doubling due to the age, property taxes and maintenance. You'll also need to rotate all 24 properties at some point (27 years) in order to restart your depreciation. With changing times, you might find C neighborhoods become ghetto. No sense in rotating them for newer homes so I can die with a bunch of 30 year mortgages and little cashflow. Maybe this makes sense to those posters above but not for me.

Treat DST like the new timeshare lol. One would have to describe why it's safer than a CD, Bond, Annuity (which is federally insured) or just the S&P 500. They can't, which is why they just post a link and disappear.

Can you really "restart depreciation "? The only thing you can do to get some ongoing depreciation is to trade into higher basis or just buy additional properties. The idea of just rotating properties does nothing to accomplish this, as the zero basis will have to be dealt with, either pay the full capital gain, or 1031 and restart the new acquisition with an adjusted (reduced) basis.
I thought that was what I said. Rotate a property like sell it and buy a new one. That's what some people do after 30 years.
0 Reply
Eric W.
Investor · WI · Member since 2015 · 16 posts · 11 votes
2y
Buying another property for sure will get you some new basis for depreciation. But there since the zero basis in a long held property will either have to be taxed, or transfer that zero basis to the next one, there is no magic in "rotating". Either buy more if that's your plan or trade up, but there is no restarting of depreciation. Unless you die and get the step up, you will have to own up to the depreciation that you already took.

Furthermore, there is no mathematical argument for waiting 27 years, or whatever your depreciation life is. The few dollars of basis at the end of a cycle are insignificant compared to the likely appreciation after 10-20 years, and the swap or sale should be done based on larger portfolio plan, etc., rather than an arbitrary depreciation schedule. You just can't escape the transfer of (reduced) basis on 1031 or the recapture on sale unless you croak.
1 Reply
Henry ClarkPro Member
Developer · Member since 2020 · 4k+ posts · 4k+ votes
2y
Quote from @K S.:

Quote from @Carlos Ptriawan:

Quote from @Bill B.:

@K S.

$20k/mo far exceeds my expenses already.
when did you make your first purchase ? KS and Bill ?

Ok I thought Bill meant 20k/year not per month which is more than enough to retire but to put things into perspective, accoridng to the historical S&P 500 calculator, I could have acheived the same results as Bill with just $1M invested 16 years ago. Pulling just 5%/year of the 5M today is around 20k/month (and would still increase in value). That would net me aproximately the same cashflow as Bill but for absolutely zero time in. Despite the nuiances, I prefer the latter which is why I'm stopping at 10 properties after this build and will sell off some in retirement as streamlining your life becomes more important. I don't find it "fun" as others say to rent out houses you've never seen and will never live or vacation in. I would get rid of the rest and convert them into a steady income streams. Diversification is better anyways and some investments like your 401k can't be taken in a lawsuit.

I have plenty of colleagues that retired and soon to retire off their 401k and other market investments with millions at the same age as you guys but without the tenants, mortgages, lawsuites, maintenance, always searching, offering, closing and renovating, cpa headaches etc.

Totally agree with you $1mm investment versus $1mm investment I would rather do stock bonds.
But not included in the $20k per month is the appreciation value during that period also the leverage at point A. Most people don’t start with $1mm in savings at point A.
Real estate will always beat stocks bonds because the government set it up that way. 1031, 2 out of 5 primary, writeoffs, sweat equity, ADU value add, STR, MTR, etc. You can do options on stock but you can get calls. Not in houses if you're making payments.
Plus the best thing of all is when you fail in REI it's your fault.
2 Reply
Bonnie LowPro Member
Lender · Asheville, NC · Member since 2016 · 1k+ posts · 1k+ votes
2y
No. I enjoy being an active real estate investor. Our plan is to build our portfolio and involve our sons, which we've already started doing. At some point they'll take over the business and do whatever they want with it (though 2 of the 3 already have the real estate "bug"). We're setting up for a certain amount of passive income for ourselves and the boys can grow it however they want.
[email protected]
3 Reply
K S.
Member since 2021 · 401 posts · 254 votes
2y
Quote from @Henry Clark:

Quote from @K S.:

Quote from @Carlos Ptriawan:

Quote from @Bill B.:

@K S.

$20k/mo far exceeds my expenses already.
when did you make your first purchase ? KS and Bill ?

Ok I thought Bill meant 20k/year not per month which is more than enough to retire but to put things into perspective, accoridng to the historical S&P 500 calculator, I could have acheived the same results as Bill with just $1M invested 16 years ago. Pulling just 5%/year of the 5M today is around 20k/month (and would still increase in value). That would net me aproximately the same cashflow as Bill but for absolutely zero time in. Despite the nuiances, I prefer the latter which is why I'm stopping at 10 properties after this build and will sell off some in retirement as streamlining your life becomes more important. I don't find it "fun" as others say to rent out houses you've never seen and will never live or vacation in. I would get rid of the rest and convert them into a steady income streams. Diversification is better anyways and some investments like your 401k can't be taken in a lawsuit.

I have plenty of colleagues that retired and soon to retire off their 401k and other market investments with millions at the same age as you guys but without the tenants, mortgages, lawsuites, maintenance, always searching, offering, closing and renovating, cpa headaches etc.

Totally agree with you $1mm investment versus $1mm investment I would rather do stock bonds.
But not included in the $20k per month is the appreciation value during that period also the leverage at point A. Most people don’t start with $1mm in savings at point A.
Real estate will always beat stocks bonds because the government set it up that way. 1031, 2 out of 5 primary, writeoffs, sweat equity, ADU value add, STR, MTR, etc. You can do options on stock but you can get calls. Not in houses if you're making payments.
Plus the best thing of all is when you fail in REI it's your fault.

I did add the appreciation value. My rough estimate is that both investments would work out to be near the same in the end. True, most wouldn't start with 1m. I think dolar cost averaging would net 3.2m so not as good but also, not everyone in RE did well either.

I do like the new ADU laws but everything you mentioned is still what makes RE not truly "passive" hence why I would sell in retirement. I woud sell time waisting properties in retirement to help streamline your life to add time for things that make you happy. If finding strangers to move into a house you've never seen, will never live in or vacation in is ones idea of "fun", then great but why not transfer homes into federally insured vehicles, some of which are protected against creditors and lawsuits. I haven't found any good answers other than I like landlording and stop being a hater.
2 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @K S.:

Quote from @Henry Clark:

Quote from @K S.:

Quote from @Carlos Ptriawan:

Quote from @Bill B.:

@K S.

$20k/mo far exceeds my expenses already.
when did you make your first purchase ? KS and Bill ?

Ok I thought Bill meant 20k/year not per month which is more than enough to retire but to put things into perspective, accoridng to the historical S&P 500 calculator, I could have acheived the same results as Bill with just $1M invested 16 years ago. Pulling just 5%/year of the 5M today is around 20k/month (and would still increase in value). That would net me aproximately the same cashflow as Bill but for absolutely zero time in. Despite the nuiances, I prefer the latter which is why I'm stopping at 10 properties after this build and will sell off some in retirement as streamlining your life becomes more important. I don't find it "fun" as others say to rent out houses you've never seen and will never live or vacation in. I would get rid of the rest and convert them into a steady income streams. Diversification is better anyways and some investments like your 401k can't be taken in a lawsuit.

I have plenty of colleagues that retired and soon to retire off their 401k and other market investments with millions at the same age as you guys but without the tenants, mortgages, lawsuites, maintenance, always searching, offering, closing and renovating, cpa headaches etc.

Totally agree with you $1mm investment versus $1mm investment I would rather do stock bonds.
But not included in the $20k per month is the appreciation value during that period also the leverage at point A. Most people don’t start with $1mm in savings at point A.
Real estate will always beat stocks bonds because the government set it up that way. 1031, 2 out of 5 primary, writeoffs, sweat equity, ADU value add, STR, MTR, etc. You can do options on stock but you can get calls. Not in houses if you're making payments.
Plus the best thing of all is when you fail in REI it's your fault.

I did add the appreciation value. My rough estimate is that both investments would work out to be near the same in the end. True, most wouldn't start with 1m. I think dolar cost averaging would net 3.2m so not as good but also, not everyone in RE did well either.

I do like the new ADU laws but everything you mentioned is still what makes RE not truly "passive" hence why I would sell in retirement. I woud sell time waisting properties in retirement to help streamline your life to add time for things that make you happy. If finding strangers to move into a house you've never seen, will never live in or vacation in is ones idea of "fun", then great but why not transfer homes into federally insured vehicles, some of which are protected against creditors and lawsuits. I haven't found any good answers other than I like landlording and stop being a hater.

Your explanation is very reasonable, we shld approach investment from practicality as well. Not everyone like hyper-active investment.
2 Reply
Henry T.
Member since 2022 · 1k+ posts · 1k+ votes
2y
I have an exit plan to get out of Seattle(toxic), but tangible real estate is the best plan to keep generational wealth. If the kids want to sell after I kick, fine, but hopefully they will see the light. If you have it now, keep it, because obtaining real estate in the future will not get easier.
4 Reply

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