Asset Allocation for Real Estate Investors - % of net wort in RE

[Rob Brown]

I am a real estate broker and investor who's been investing since 1999 when I bought my first property at 19. I have always had 80-90% of my total net worth invested in real estate and the rest liquid as a cash reserve besides maxing out my IRA, SEP IRA or Solo 401k for tax purposes. I've been reading a lot more the past few years, and I've gotten really into all of the books, podcast, and blogs in the FinCon community. I have come to believe I should have a substantial portion of my net worth invested in a Schwab Total Stock Market Index Fund (SWTSX) or Vanguard Total Stock Market Index Fund (VTSAX). My questions is, what % of a real estate investor's net worth should be in index funds and bonds, and what % in real estate? I'm considering 1. selling a property to diversify versus just 2. not buying any more real estate and investing only in Index Funds and Bonds until I get to the asset allocation of 50% real estate 50% equities and bonds, however, because of my substantial equity in R.E. it could take 10-20 years to get to 50-50 without selling a property even if I'm investing 50% of my net income. What does the community think about this?

[Steve Vaughan]

Love the awesome chilli or mediocre tacos analogy, Bill.  I may even go one further and compare a fine motor mechanic to becoming a carpenter or rehabber.  They both fix things,  but why change specialties?

I used to be 100% paper equities and was a series 7 licensed stockbroker. I never liquidated my retirement funds but am now 94% RE, 6% mutual funds and stocks.  My specialty is RE. I am sticking with the one that brought me.

I have financial/wealth advisor friends that say 'If you ever sell, let me know. Be happy to manage your portfolio.' They know nothing about RE. 90+% won't, so don't expect an unbiased opinion on your asset allocation.  They make no fees or commissions from RE acquisition or debt paydown.

"Put all your eggs in one basket, then watch that basket." Andrew Carnegie    Do what you know and can control.