Is it wrong to sell everything now?

[Ash Patel]

I am mostly a non-residential commercial investor. I have sold half of my commercial holdings and wonder if I should start selling the few SFR's that I have. The prices have increased roughly 50% from when I purchased them. The dilemma is how much more upside can this market endure vs. what is the downside risk? My philosophy is don't get greedy and no one ever went broke from taking a profit. Would love to hear your thoughts.

[JD Martin]

The other problem is: what would you do with the money? Every dollar has to be parked somewhere, whether that's in an IRA, CD, stocks, real estate, a checking account, or a coffee can in the backyard.

This, I believe, is one of the advantages of buy & hold where the property is not leveraged. It ends up being something similar to a decent dividend index fund, some years being more profitable, some years less, but always churning out real cash to the owner. If your strategy is long term, and the property is profitable and not facing some serious upcoming challenges, then the question is: can you get a better return elsewhere? Most of the time, bouncing your money around in any investment game is folly, as you frequently lose the edges (fees, taxes, whatever), and the edges is what increases the overall size of the thing.