Sell now off market or wait 10 months?

[Alex Todd]

Hey BP - we have a SFH that has been a LT rental (only 2yrs) but with same tenants, who are asking if we'd be willing to sell off market, in the next 90 days.

Their current lease extends to  April 2025, which at that point we were planning on selling.

Why sell in the first place? ROE is so low (.6%) that at this point in our RE journey, we believe our $$ can do more for us elsewhere and we still sit within Sec121 exclusion to avoid some CG tax. 

Any strong positions to waiting? Moving forward? Things we should look out for, lobby for, strategize on? 

Thanks!

Alex

[Marcus Auerbach]

Seldom sell. It's called buy and hold for a reason. Where do you think this will be in 10, 20, 30 years? I regret every property I sold 10 years ago (except the ones in the hood, that was a short term experiment I am glad I got out off).

Your total net worth contribution is a lot higher than 0.6%, just the paydown of your loan is double digit ROI. Plus appreciation. Cash flow is overrated, it does very little to create wealth. Even in the Midwest (I am in Milwaukee) it is hard to make more than $200 per door, regardless of your goal, you need many, many doors. Like 50 or 100, not just 2.

Not enough specifics to give you a better answer, but it sounds to me like you are considering giving up a great equity play that moves the needle quite a bit (San Diego, right?) for a couple hundred dollars in cash flow and a lot of work. Think long term!