Sell and buy now or hold and wait

[Jiacheng Liu]

We bought our first townhome(4bd/4bath) back in 2021 for 565k, and now is around 750 - 800k; we currently still owe 430k with 3% rate, monthly payment all together is around $3500.

We have two more rental properties; they cash flow $800 in total income per month. We do have someone also live with us to pay us about $900 per month.

We are looking into different options right now; we would like to create more passive income for our future. We are thinking of selling our property to avoid capital gain and then use a low-downpayment for a 3bd room condo, and try to get a roommate to house hack. Then use the extra cash to invest 1 or 2 other rental properties. But with toady's market, the cash flow will probably be around 150-300 per unit. Then we are going to save up as much as we can, then use a low-downpayment for another place to live in 12 months. We would repeat that process for the next few years to scale up.

On paper everything could pencil out, but every move does come with the risk. I do worry that I do not have enough reserve if something in any of the properties goes wrong. I do worry about after selling and downsize, I have extra cash sitting in the bank and there is no deals on the market at all.

With today's market, is that a good time to do it? Or should I hold to see how the market goes?

Need honest opinions.

Let me know what you think? any suggestions?

[Nathan Gesner]

Quote from @Jiacheng Liu:

My belief is that you should never sell a property unless you know the money can be invested in something that performs better. The first step is to admit that you got lucky. You were lucky to purchase when rates were low. You were lucky that property values shot through the roof. You took a chance and the timing worked out for you in ways you didn't expect. I would hold onto those gains until I'm certain I have a clear path of increasing returns.

My recommendation would be to save up cash flow from all the investments and build your reserve. After you have a solid reserve, then start building up a pile of cash for the next investment. Keep the properties you've got until the market shifts and you know (with reasonable certainty) that it makes sense to reinvest in another asset that will accelerate your growth.

It's not very often that I hear an investor say, "Gee, I wish I would have sold that house ten years ago."

What you will hear investors say is, "Gee, I wish I would have kept that house instead of selling it."