Sell your rentals and buy stocks?
9 Replies
Carlos Gonzalez
Investor from Phoenix, Arizona
posted 10 months ago
I have Fourplexes I bought in 2016 and now people are calling me to make me an offer as twice as much as the mortgage obligation. I think the stock market is good if you know how to play it same as real estate but different asset classes. I already have some investment in the stock and have done well during the last two years.
What are you guys doing? Are you guys keeping your real estate portfolio untouched but buying more in the stock market or you guys ignoring the opportunity of the stock market now?
Jacob Sampson
Investor from Topeka, Kansas
replied 10 months ago
I have always maintained exposure to the market. I have a 401k, ROTH IRA, and traditional IRA. The market has 100s of years of history of being able to turn a profit. In real estate I only have 15. I'm doing both. As we tank I am definitely moving cash into the market incrementally and may begin to move real estate cash flow in as well. Not getting rid of my real estate, although I don't have people offering me large chunks of money to do so.
Evan Polaski
from Cincinnati, OH
replied 10 months ago
The hard part with exiting real estate now is investors seem to be a little spooked, just as they are with the market. Obviously, deals are still getting done, and I actually just got a text an hour ago from an "investor" interested in my area. But then when I told him my prices which are market rates for the houses, he wanted seller financing.
That being said, I think the market is probably good to move money towards, but to reinvent your entire investment approach is operating more like a day trader. I am all for capitalizing on good deals, but particularly if it means selling assets that you wouldn't have otherwise been contemplating selling, just to try to time this market, is a risky play in my eyes.
Carlos Gonzalez
Investor from Phoenix, Arizona
replied 10 months ago
I see that you’re very well prepared in any case. I think having more than 1 asset class is the way to go since all assess classes go in cycles. Right now, is the stock market going down because is due for one, later on, the real estate market will go down because it just natural. I think having an open mind for different asset classes is beneficial.
Thank you for sharing Jacob.
Carlos Gonzalez
Investor from Phoenix, Arizona
replied 10 months ago
For what I hear and see real estate is good and is not overpriced for some investors since they’re buying deals left and right. May be real estate has a couple of more years to go then.
May be moving a bit of cash flow to the stock market might be a good strategy.
Thanks for sharing Evan
Caleb Brown
replied 10 months ago
It's is good to diversify. That being said I wouldn't sell all and put it into stocks. Having all eggs in one basket will leave you over leveraged. You could sell of one and use that for stocks then continue to grow both. One questions I have is have you bought stocks or would it be new to you? Sounds like those properties have been performing well, if it ain't broke why fix it?
Timothy VanWingerden
Real Estate Broker from Lexington, KY
replied 10 months ago
If someone is offering you double the mortgage for your property, it sounds like you will make a solid return for your investment from 2016 and selling could make good sense. If I was in a situation where I had more cash available, I would definitely be putting it in the market. Another option is refinancing with the lower rates (when they reach prime) and putting some of that cash into the market - that is if the refinance still allows you to cash flow comfortably.
Since I'm borrowing private money to fund real estate it doesn't make sense for me to put it in the market because then I would have to borrow more private money at a high premium to offset the money I've invested in the market. Still considering it though... All the value investors are bargain shopping and it is very tempting.
Carlos Gonzalez
Investor from Phoenix, Arizona
replied 10 months ago
It’s good to diversify, I agree with your opinion Caleb. I started playing the stock market about 2 years ago and I did alright. And I think right now it’s a good opportunity to jump in again. I love playing the stock market. It’s fun.
Carlos Gonzalez
Investor from Phoenix, Arizona
replied 10 months ago
It’s tempting to sell and put it in the stock market I know.
Caleb Brown
replied 10 months ago
@Carlos Gonzalez Well since you have experience i'd jump in. Like I said diversify so 50/50. The stock market has been going up and down the last few days, don't know where the bottom is.