Cashing out equity investments for real estate?

[Nadav Swarttz]

I'm sure many people have struggled with this question before me- should I cash out my more traditional investments in stocks/bonds in order to expedite my ability to buy property? Personally, I've been investing (in the market) for years and have a mix of equity investments in various forms and then retirement accounts which have funds I would not touch since that would of course incur a penalty. I have always been in the mindset of investing free cash to have it do work in the market since it's better than collecting dust in a savings account. While that is sound if you are not planning to use the funds in the immediate future, it puts a squeeze on cash reserves to use towards other investments.

In terms of funds to my name, if I were to cash out a solid portion my equity investments, I would be be able to fund an initial purchase into real estate. However I'm struggling with pulling the trigger on that and am leaning towards (the admittedly safer route) building up cash from my w2 job, leaving the equity investments to grow and moving into real estate once I've built up the cash to do so. 

For context if it helps- as far as the real estate route I would be looking to purchase a multi family home, live in one unit and rent out the others. Ideally I would like to invest relatively close to the city of Boston. That being said, in the interest of getting started sooner than later (again because of the high prices in this area) I would certainly consider investing out of state where there is job and population growth. 

I'd love to hear from any investors who have had similar dilemmas, anything that helped you make a decision and of course how it has worked for you since then. 

[Nadav Swarttz]

Hi Jeff, 

That was awesome- thank you for commenting. That's a great perspective and viewpoint to take. Looking at it the same way as a stock in terms of the percentages in a portfolio minimizes the stark difference between real estate and equities and puts in perspective as another investment one way or another. 

That definitely helps!