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 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?
We sold it all in 2019 and retired in our early 40s. Thought about 1031 but after a year couldn’t find anything that would cash flow as well as our units. Didn’t want to the hassle of maintenance or management. So we sold it all piece by piece, paid the taxes, and never looked back. Also it completely freed us to be able to travel anytime anywhere for weeks at a time and ultimately months at a time.
I know we had less on paper right after selling. But the stock market has been good and I think we made up most if not all of the $ lost to taxes in the last few years. And probably from here on our networth will grow even faster than had we left it in RE. The stock market does tend to grow much faster. And no hassles.
We bought some amount of dividend paying stocks and indexes that help to offset our previous cashflow.
I initially thought I would keep the properties as a part time job forever. But, once we had enough networth and dividends there was no more need to keep working.
To each their own. We decided that enough was enough and left the field completely. Never been happier or less stressed.
We sold it all in 2019 and retired in our early 40s. Thought about 1031 but after a year couldn’t find anything that would cash flow as well as our units. Didn’t want to the hassle of maintenance or management. So we sold it all piece by piece, paid the taxes, and never looked back. Also it completely freed us to be able to travel anytime anywhere for weeks at a time and ultimately months at a time.
I know we had less on paper right after selling. But the stock market has been good and I think we made up most if not all of the $ lost to taxes in the last few years. And probably from here on our networth will grow even faster than had we left it in RE. The stock market does tend to grow much faster. And no hassles.
We bought some amount of dividend paying stocks and indexes that help to offset our previous cashflow.
I initially thought I would keep the properties as a part time job forever. But, once we had enough networth and dividends there was no more need to keep working.
To each their own. We decided that enough was enough and left the field completely. Never been happier or less stressed.
We sold it all in 2019 and retired in our early 40s. Thought about 1031 but after a year couldn’t find anything that would cash flow as well as our units. Didn’t want to the hassle of maintenance or management. So we sold it all piece by piece, paid the taxes, and never looked back. Also it completely freed us to be able to travel anytime anywhere for weeks at a time and ultimately months at a time.
I know we had less on paper right after selling. But the stock market has been good and I think we made up most if not all of the $ lost to taxes in the last few years. And probably from here on our networth will grow even faster than had we left it in RE. The stock market does tend to grow much faster. And no hassles.
We bought some amount of dividend paying stocks and indexes that help to offset our previous cashflow.
I initially thought I would keep the properties as a part time job forever. But, once we had enough networth and dividends there was no more need to keep working.
To each their own. We decided that enough was enough and left the field completely. Never been happier or less stressed.
Like the story , smart decision
But I guess you don’t end up selling your primary
I second that. the public markets also present a great opportunity, especially now. And it is completely passive, with no other liabilities to worry about.
And if folks is smart , public investment is better than private or real estate because position can always be hedged
Sure, there are plenty of additional opportunities / options... Its funny how the same principals /adages for choosing real estate investment are the same for public markets, but applied nearly opposite...
Sure, there are plenty of additional opportunities / options... Its funny how the same principals /adages for choosing real estate investment are the same for public markets, but applied nearly opposite...
yeah, actually the most differences between real estate and index/stock/options is that.......... with direct real estate, the risk/reward is not being shared to other investor although we follow the same local market trajectory in general ; while for stock/index/option the risk/reward is being shared among the masses.
So when we say for example, S&P crashed 20%, the pain was shared to million people that experienced the same ; while for real estate if we have issue with our own, nobody care other than ourselves. Real Estate is fit to an entrepreneur spirit.
Having said that, from R/R perspective only, direct real estate ownership and leveraging it is good during cheap money era, but when money is expensive, then the R/R to stock/real estate/debts are relatively not much different.
https://thedyrt.com/magazine/lifestyle/trans-america-trail/ If you find Juan Browne's Bloncoliro channel he chronicles this adventure from start to finish.. Really cool U tuber American Airlines pilot as well so he does a lot of aviation stuff as well..
I found itNo, 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.
Had to reply to this. While optimizing taxes, ROI, ROE, IRR, and all the other wiz bang math is great...is that the tail wagging the dog? I would think life is about QUALITY of life, not how to pay the least taxes when you die...
Which is really what this thread is all about, what is your goal with real estate and does it involve an exit from it? I guess for some, they need to scale so they can have the private jet lifestyle ASAP. Others just want enough to not work and are ok with getting the jet slowly.
Some I guess will never get tired of dealing with tenants or property managers (I've had to manage my recent trial of one this past year, they sucked). If I trusted the stock market, even an index fund tracking the S&P500, I'd probably keep the RE I have and focus more on investing in the stock market, but alas, I don't trust it, and most people I've met don't either. Yes, time in the market is key, but most, myself included, have had a tendency to gamble on stocks, lose our money and never truly hold. Now I'm trying big name companies and holding. So far so good. If it works out, I'll grow that more so I'm not as tied to managing rentals. The thing about rentals is, you're always exposed to risk of lawsuits more so than just being an everyday Joe.
Yes that's a fair response. Different strategies for different people, no right or wrong way to do it.
Bill for the Win!!!!
Nope! Never :)
We sold it all in 2019 and retired in our early 40s. Thought about 1031 but after a year couldn’t find anything that would cash flow as well as our units. Didn’t want to the hassle of maintenance or management. So we sold it all piece by piece, paid the taxes, and never looked back. Also it completely freed us to be able to travel anytime anywhere for weeks at a time and ultimately months at a time.
I know we had less on paper right after selling. But the stock market has been good and I think we made up most if not all of the $ lost to taxes in the last few years. And probably from here on our networth will grow even faster than had we left it in RE. The stock market does tend to grow much faster. And no hassles.
We bought some amount of dividend paying stocks and indexes that help to offset our previous cashflow.
I initially thought I would keep the properties as a part time job forever. But, once we had enough networth and dividends there was no more need to keep working.
To each their own. We decided that enough was enough and left the field completely. Never been happier or less stressed.
A few mil. Took home a couple mil. plus I have a pension that pays for all our basic living expenses. So, whatever dividends we get we spend on luxuries and vacations. And we each have our own 401Ks that we maxed out each year for about 20 years.
But theoretically, $2M in stocks alone should produce more than enough between growth and divs to pay our living expenses if I didn’t have a pension.
We sold it all in 2019 and retired in our early 40s. Thought about 1031 but after a year couldn’t find anything that would cash flow as well as our units. Didn’t want to the hassle of maintenance or management. So we sold it all piece by piece, paid the taxes, and never looked back. Also it completely freed us to be able to travel anytime anywhere for weeks at a time and ultimately months at a time.
I know we had less on paper right after selling. But the stock market has been good and I think we made up most if not all of the $ lost to taxes in the last few years. And probably from here on our networth will grow even faster than had we left it in RE. The stock market does tend to grow much faster. And no hassles.
We bought some amount of dividend paying stocks and indexes that help to offset our previous cashflow.
I initially thought I would keep the properties as a part time job forever. But, once we had enough networth and dividends there was no more need to keep working.
To each their own. We decided that enough was enough and left the field completely. Never been happier or less stressed.
Like the story , smart decision
But I guess you don’t end up selling your primary
Thanks !
we actually did sell our primary home, a SFH, and moved into a coop apt lol. Totally maintenance free. No more shoveling snow, raking leaves, etc. And the apt cost 1/2 of the house. So we were able to bank that as well. So now we just lock the apt door and go off wherever we want without worrying about security, maintenance, etc. Total freedom :)
We sold it all in 2019 and retired in our early 40s. Thought about 1031 but after a year couldn’t find anything that would cash flow as well as our units. Didn’t want to the hassle of maintenance or management. So we sold it all piece by piece, paid the taxes, and never looked back. Also it completely freed us to be able to travel anytime anywhere for weeks at a time and ultimately months at a time.
I know we had less on paper right after selling. But the stock market has been good and I think we made up most if not all of the $ lost to taxes in the last few years. And probably from here on our networth will grow even faster than had we left it in RE. The stock market does tend to grow much faster. And no hassles.
We bought some amount of dividend paying stocks and indexes that help to offset our previous cashflow.
I initially thought I would keep the properties as a part time job forever. But, once we had enough networth and dividends there was no more need to keep working.
To each their own. We decided that enough was enough and left the field completely. Never been happier or less stressed.
Like the story , smart decision
But I guess you don’t end up selling your primary
Thanks !
we actually did sell our primary home, a SFH, and moved into a coop apt lol. Totally maintenance free. No more shoveling snow, raking leaves, etc. And the apt cost 1/2 of the house. So we were able to bank that as well. So now we just lock the apt door and go off wherever we want without worrying about security, maintenance, etc. Total freedom :)
okay so this one is basically sell everything real estate and back to renting again ;-)
not entirely true... He is still investing, just not in real estate...
We sold it all in 2019 and retired in our early 40s. Thought about 1031 but after a year couldn’t find anything that would cash flow as well as our units. Didn’t want to the hassle of maintenance or management. So we sold it all piece by piece, paid the taxes, and never looked back. Also it completely freed us to be able to travel anytime anywhere for weeks at a time and ultimately months at a time.
I know we had less on paper right after selling. But the stock market has been good and I think we made up most if not all of the $ lost to taxes in the last few years. And probably from here on our networth will grow even faster than had we left it in RE. The stock market does tend to grow much faster. And no hassles.
We bought some amount of dividend paying stocks and indexes that help to offset our previous cashflow.
I initially thought I would keep the properties as a part time job forever. But, once we had enough networth and dividends there was no more need to keep working.
To each their own. We decided that enough was enough and left the field completely. Never been happier or less stressed.
Like the story , smart decision
But I guess you don’t end up selling your primary
Thanks !
we actually did sell our primary home, a SFH, and moved into a coop apt lol. Totally maintenance free. No more shoveling snow, raking leaves, etc. And the apt cost 1/2 of the house. So we were able to bank that as well. So now we just lock the apt door and go off wherever we want without worrying about security, maintenance, etc. Total freedom :)
okay so this one is basically sell everything real estate and back to renting again ;-)
We sold it all in 2019 and retired in our early 40s. Thought about 1031 but after a year couldn’t find anything that would cash flow as well as our units. Didn’t want to the hassle of maintenance or management. So we sold it all piece by piece, paid the taxes, and never looked back. Also it completely freed us to be able to travel anytime anywhere for weeks at a time and ultimately months at a time.
I know we had less on paper right after selling. But the stock market has been good and I think we made up most if not all of the $ lost to taxes in the last few years. And probably from here on our networth will grow even faster than had we left it in RE. The stock market does tend to grow much faster. And no hassles.
We bought some amount of dividend paying stocks and indexes that help to offset our previous cashflow.
I initially thought I would keep the properties as a part time job forever. But, once we had enough networth and dividends there was no more need to keep working.
To each their own. We decided that enough was enough and left the field completely. Never been happier or less stressed.
A few mil. Took home a couple mil. plus I have a pension that pays for all our basic living expenses. So, whatever dividends we get we spend on luxuries and vacations. And we each have our own 401Ks that we maxed out each year for about 20 years.
But theoretically, $2M in stocks alone should produce more than enough between growth and divs to pay our living expenses if I didn’t have a pension.
My goal is to amass as much as possible for the rest of my life then pass it along to my kids. They are both interested in real estate so they want in on the action. This will give me a chance to provide opportunities for my grandkids that I couldn't provide for my own kids.
My goal is to amass as much as possible for the rest of my life then pass it along to my kids. They are both interested in real estate so they want in on the action. This will give me a chance to provide opportunities for my grandkids that I couldn't provide for my own kids.
We sold it all in 2019 and retired in our early 40s. Thought about 1031 but after a year couldn’t find anything that would cash flow as well as our units. Didn’t want to the hassle of maintenance or management. So we sold it all piece by piece, paid the taxes, and never looked back. Also it completely freed us to be able to travel anytime anywhere for weeks at a time and ultimately months at a time.
I know we had less on paper right after selling. But the stock market has been good and I think we made up most if not all of the $ lost to taxes in the last few years. And probably from here on our networth will grow even faster than had we left it in RE. The stock market does tend to grow much faster. And no hassles.
We bought some amount of dividend paying stocks and indexes that help to offset our previous cashflow.
I initially thought I would keep the properties as a part time job forever. But, once we had enough networth and dividends there was no more need to keep working.
To each their own. We decided that enough was enough and left the field completely. Never been happier or less stressed.
Like the story , smart decision
But I guess you don’t end up selling your primary
Thanks !
we actually did sell our primary home, a SFH, and moved into a coop apt lol. Totally maintenance free. No more shoveling snow, raking leaves, etc. And the apt cost 1/2 of the house. So we were able to bank that as well. So now we just lock the apt door and go off wherever we want without worrying about security, maintenance, etc. Total freedom :)
okay so this one is basically sell everything real estate and back to renting again ;-)
KS this is the beauty when we comparing different asset class based on math.
So lets dig deeper:
2010-2015 era: mortgage 3% ; CD rate: 0 %; Appreciation: 6%; inflation 3%... spread between CD and appreciation is -6%
2023-era: mortgage 6%; CD rate:5% ; Appreciation 3%; inflation 3%....spread between CD and appreciation is +2%
So there're spread of 8% between 2010-2015: leverage equity is the best. But in 2023 hoarding cash could yield almost similar appreciation.
In 2010 era, typical asset class cap rate : 10% ; typical asset classs in 2023: 4%
Summary: by converting real estate equity to cash/debt position from 2023 and forward, as long as rate of appreciation is less than inflation, we don't actually lose that much.
So yes selling everything real estate is making sense in 2023 as well. Even back to pure renting too.
( I personally thinking about this but thinking 30 years from now I don't want kid to pay mortgage so I use primary-DSCR>1 strategy instead )
My goal is to amass as much as possible for the rest of my life then pass it along to my kids. They are both interested in real estate so they want in on the action. This will give me a chance to provide opportunities for my grandkids that I couldn't provide for my own kids.
Many lottery winners have poor financial fundamentals. If you teach your kids properly it will greatly reduce their chances of being irresponsible with money and other aspects of being a responsible adult.
Not renting. You own coop apts :)
You pay maintenance each month like a condo owner pays the common charges. But the maintenance is all inclusive. Has, heat, water, taxes etc. the only other bill we pay is for internet. 2 bills per month :)
@K S
My situation was a bit more complicated. I had access to both a 401 and a 457, amongst a couple other retirement accounts. No matching. 1 account I did for 22 years and the other for about 12. Those 2 ended up at around $1.4M when I retired 5 years ago. The smaller accounts brought me up to about $2M. My wife did her 401 for 19 years and ended up at almost $1M. She had matching. So between the 2 of us we had $3M in our retirement accounts. now around $4M. So yeah, if we need to it would easily cover our living expenses even though we’re 11 years shy of 59.5.
Yes I agree with your rental numbers. Sometimes it’s way cheaper to rent and invest the savings, which would usually grow much faster and be completely passive. There’s no shame to renting, as long you’re investing the savings. It’s all about getting to that number as soon as we can, right? Renting cheaply is just another way toward that goal:)
Oops, I see what you mean now. Yeah we still have a primary, which is now the coop apt that we own. And yes we plan to never sell that one, unless my wife wants a different apt. So, no, probably never renting.