Selling house at a loss - what next?

Question

Hi BP,

I own a property in SF Bay Area and and selling the property at a loss. The rental market has been hurt as you know. And the/my timelines and horizon for return have changed for obvious reasons.

That all said...I am taking a loss in terms of fees, rental income etc. And will be able to recoup some down payment.

My question is...the same question some have asked me...what would you do next given this environment? There are tax benefits/take paper losses , 1031 out of question bc no gains, go to new market, hold cash, buy Bitcoin as hedge against inflation etc etc.

It's an open ended question on purpose because I'm really curious to hear this community thoughts perspective and advice.

Thanks in advance for contributing!

Russell Brazil · Answer

Every time Ive lost money, I double down to make my losses back.

Alexander Szikla · Answer

Why sell?

Darius Ogloza · Answer

The fix and flip market up in Marin has been very strong over the past 18 months.  Cash on cash return in the 30%-40%.  Right now inventory is very low but it should improve a little as we approach spring.  No crystal ball but we do not expect demand for close to the city suburban homes to diminish in 2021.  If you do not have appetite for something like this or the time, I would consider high dividend paying equities.

Russell Brazil · Answer

I invest primarily in DC. So the times Ive lost money, Ive sold within the DC market and redeployed capital within the same market to better assets.

I also, dont just sell if my value is down. The first 2 or 3 years I bought rentals they largely were in a declining market 2008-2011. But I had the belief that eventually they would come back. So especially then when I bought, I was really going in buying more in part because of the declining prices.

Andy C. · Answer

@Russell Brazil good advice. And of course every situation different do you mean you actually will go buy another property in the same market or street even though you're at a loss already? Curious to hear more

Selling house at a loss - what next?

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