Selling to scale. Is it worth it?

[Stephen Jones]

BP,

I am looking for some advice from investors who have had experience with selling a portfolio to scale there real estate business. Is it worth it? Do you regret it? Should you have just continued cash flowing with the current portfolio and paid down debt?

My current portfolio is strong, in decent areas (I would say B class) it cash flows well, I’ve built up quite a bit of equity over a 5-6 year period.

Would you sell that cash flowing portfolio for a larger asset if you could? I am looking at a 100 unit property and I would have to sell my current portfolio to accumulate this asset and I am just at a crossroads. The 100 unit is currently mismanaged, rents aren’t where they need to be but at the same time it has ALOT of potential under the right ownership. Any feedback would help! Thanks!

[Caleb Brown]

I think that'd be a good idea. But each person has different interest. I would weigh the pros and cons and make a decision regarding the financial part along with what you'd prefer. When you sell a large SF portfolio it is a little harder and you do discount the properties compared to what they are worth on the MLS(usually). It'll be sold based on the rents more then the comps.