Sell stocks for down payment?

[Joe B.]

Hey all

Getting really close to finally saving up for a down payment. Currently have 15k dedicated to that. Im still unsure whether I want to go the FHA route or conventional. If I go conventional, I will need a little more for a down payment. Been saving/investing non stop since I was 21. I currently have 40k in a vanguard 2 fund portfolio. Yes its growing, but could grow much more if it were placed in real estate possibly. I know Cardone would tell me to ditch that, take it out, and get some property. I also have 20k in a Roth IRA that I know I can touch no problem (if used for a first time house). What are your thoughts on that? Long term I want to be a REI. Im 27 and want 10 properties by the time Im 37. The money used can be a huge start to my REI career. Do you think I should take out maybe 50%?

What are your thoughts?

[Tommy F.]

@Joe B. You're saving for down payment, but you also need to have some cash reserves, usually 6 months (check with a mortgage broker). The mutual funds will likely fulfill the reserve requirement. However, you also need to save cash for any repairs (unless you find something turn-key) and need a little cash on the side for future repairs. So, either keep saving or tap into the mutual fund(s). Assuming the $40k Vanguard account is a 401k (subject to 10% penalty) you'll blow $4k on penalty and 15% on the long-term gains, and whatever your ordinary tax rate is for the short-term gains. The tax is the tax, pay it now or pay when you're over 59-1/2 and beyond. If it gets you started in REI, then go for it. Four thousand in penalty, and age 27...you have time on your side. Surely you can make-up that $4k. You're sure to get different opinions depending on your audience, but it ultimately boils down to what is best for you and your goals. Good luck.