Should you ever sell?

Should you ever sell?

Jorge VazquezBusiness Member
Real Estate Broker · Tampa, FL · Member since 2017 · 1k+ posts · 700 votes

Hey everyone, my name is Jorge Vazquez. I'm a broker in Tampa and have been navigating the real estate waters for over 20 years. Given my time in the field, I wanted to share some insights.

For me, real estate has been a cornerstone investment. Why I advocate for holding onto properties:

  1. The track record of real estate speaks for itself. It's consistently built wealth, often outperforming other assets. Before considering a sale, it's worth pondering if there's genuinely a better opportunity elsewhere.
  2. Leverage is where real estate shines. The ability to use one property to finance another feels like magic at times. And with rentals, the dual advantage of tenants paying down the mortgage and the property appreciating is hard to ignore.
  3. On the topic of rentals, having a tenant basically translates to someone else covering your mortgage. This turns what some perceive as a liability into a consistent income stream, more so with rents that typically rise over time.
  4. To me, real estate is like a high-yield stock. The rents? Think of them as juicy dividends. Couple that with property appreciation and the annual bump in rents, and it's clear why it's a top pick for many.
  5. Simplicity is a key attraction. The real estate game is straightforward, making it easy to strategize and execute. With the right moves, it can be a ticket to an early and comfortable retirement.

An observation: Many affluent individuals I've interacted with over the years have voiced regrets about letting properties go. Even with market hiccups, real estate's long-term trajectory has been positive. After all, they aren't making more land.

Now, flipping properties can be enticing, but it's a full-time gig. Casual efforts or attempts to outguess the market often backfire.

In conclusion, my mantra has remained consistent: buy, hold, and if needed, borrow against. Selling is a move I reserve for special circumstances, backed by thorough research and strategy.

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Alecia LovelessPro Member
Member since 2019 · 3k+ posts · 2k+ votes
3y

@Jorge Vazquez When I started out 26 years ago I bought 2 multi families with 14 units and a SFH. I had a partner in the multis that ended up embezzling $50K from the properties over 2 years that should have been distributed to us as cash flow. We had to go to court to force them to buy us out. Still wanting to be in real estate I purchased a SFH with the sale proceeds fixed it up and rented it to a disaster set of tenants who trashed it and sold it 16 months later.

My only real estate regret is that I didn’t stay with real estate the following 22 years when I would have built a portfolio worth close to $20M. I let two bad experiences ruin it for me at a time when the market in my area was ripe with opportunity.

4 years ago I got back in the real estate investing world this time having matured and with years of experience running a real estate related business. I found Bigger Pockets and am building a portfolio for long term growth.

You’re absolutely right that you need to be in it for the long haul. There’s other ways to access your equity than by selling unless your planning to buy up to larger properties.

Thank you for your insightful post.

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  • Rental Property Investor · Allentown, PA · Member since 2014 · 67 posts · 38 votes
    3y

    Hi Jorge,

    Great points. Lots of gold here. I might add that after holding for 4-5 years and realizing 90% of the value, waiting an extra 2-3 years for the extra 10% benefit sometimes is too slow of a payoff when you could sell, recycle the capital, and buy the next asset at a larger discount than the upside you were waiting for. 

    Over the years I've seen equity get "lazy" because I never sold. I held everything indiscriminately. Without selling, capital wasn't free to buy the next asset at a discount. I was waiting around for a 5% appreciation rate when I could have found a new asset at a steep discount. 

    After holding properties for 5-6 years minimum, I don't regret selling them. I regret not selling them sooner to buy more properties at a discounted price.

  • Investor · Member since 2022 · 235 posts · 127 votes
    3y

    Good stuff here sir!

  • Residential Real Estate Broker · Paia, HI · Member since 2016 · 479 posts · 311 votes
    3y

    I'm also struggling with the same question. Isn't there a point, when you have a mortgage, where more of your payment is going to principal versus interest that makes it better to sell from a tax standpoint?

    Shouldn't there be a formula for this??

  • Lender · West Palm Beach, FL · Member since 2017 · 306 posts · 122 votes
    3y

    Great points in favor of long term investing--I would add that property taxes typically fall further behind the real property value the longer it stays with one owner, generating efficiencies the longer you keep a property. 

  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    3y
    Quote from @Loren Clive:

    I'm also struggling with the same question. Isn't there a point, when you have a mortgage, where more of your payment is going to principal versus interest that makes it better to sell from a tax standpoint?

    Shouldn't there be a formula for this??

    Mortgages always start out with most of the money going to interest.  Once the reverse starts happening, the mortgage is goes down quickly.  I'd rather be paying down the principal than all my money going to interest.
  • Real Estate Agent · St Petersburg, FL · Member since 2019 · 321 posts · 182 votes
    3y

    In my opinion solely, if there are meaningful better IRR opportunities over the time horizon you are considering, then yes sell; otherwise no.

  • Terri B.Pro Member
    Realtor · Bellevue, Detroit · Member since 2023 · 63 posts · 14 votes
    3y

    These are good nuggets. If you have a good cash flowing property in a great location why sell. I am an investor who sold in the sell in the high market frenzy during the pandemic. While I was able to reinvest into 2 properties, I regret not knowing there are other ways to access the equity than selling. 

  • Alecia LovelessPro Member
    Member since 2019 · 3k+ posts · 2k+ votes
    3y

    @Jorge Vazquez When I started out 26 years ago I bought 2 multi families with 14 units and a SFH. I had a partner in the multis that ended up embezzling $50K from the properties over 2 years that should have been distributed to us as cash flow. We had to go to court to force them to buy us out. Still wanting to be in real estate I purchased a SFH with the sale proceeds fixed it up and rented it to a disaster set of tenants who trashed it and sold it 16 months later.

    My only real estate regret is that I didn’t stay with real estate the following 22 years when I would have built a portfolio worth close to $20M. I let two bad experiences ruin it for me at a time when the market in my area was ripe with opportunity.

    4 years ago I got back in the real estate investing world this time having matured and with years of experience running a real estate related business. I found Bigger Pockets and am building a portfolio for long term growth.

    You’re absolutely right that you need to be in it for the long haul. There’s other ways to access your equity than by selling unless your planning to buy up to larger properties.

    Thank you for your insightful post.

  • Jorge VazquezBusiness Member
    OP
    Real Estate Broker · Tampa, FL · Member since 2017 · 1k+ posts · 700 votes
    3y
    Quote from @Alecia Loveless:

    @Jorge Vazquez When I started out 26 years ago I bought 2 multi families with 14 units and a SFH. I had a partner in the multis that ended up embezzling $50K from the properties over 2 years that should have been distributed to us as cash flow. We had to go to court to force them to buy us out. Still wanting to be in real estate I purchased a SFH with the sale proceeds fixed it up and rented it to a disaster set of tenants who trashed it and sold it 16 months later.

    My only real estate regret is that I didn’t stay with real estate the following 22 years when I would have built a portfolio worth close to $20M. I let two bad experiences ruin it for me at a time when the market in my area was ripe with opportunity.

    4 years ago I got back in the real estate investing world this time having matured and with years of experience running a real estate related business. I found Bigger Pockets and am building a portfolio for long term growth.

    You’re absolutely right that you need to be in it for the long haul. There’s other ways to access your equity than by selling unless your planning to buy up to larger properties.

    Thank you for your insightful post.


     WOW, I Really appreciate you sharing your journey; it hits home for me. My own real estate road has been quite the rollercoaster—imagine dealing with a house fire set by a disgruntled former owner and some truly wild tenant troubles, including a scary stabbing incident linked to an unruly renter. It's been a real eye-opener into the extremes of property management.

    Despite these intense challenges, I've learned some invaluable lessons. Like how important it is to get back on your feet, no matter how hard you're knocked down, and to always pull wisdom from the tough times. I once stepped back from the market and later realized I'd missed out on a ton of growth opportunities.

    Taking a break did give me a fresh perspective, though. I returned to the game wiser, leveraging great resources like the Bigger Pockets community, and now I’m focused on building my portfolio for the future.

    To all the real estate warriors out there: tough times are part of the deal. But they’re not the whole story. Keep learning, stay connected, and don't be afraid to tap into your assets in smart ways. Your resilience will pay off in the long term, I promise.

    Here's to overcoming the hurdles and making our real estate goals a reality!

    Graystone Investment Group519 Reviews
  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    3y

    For the average person here they should probably get leveraged a property, or two, more than they assumed. And cash out re-finance one, and then sell those two extra properties to pay down the debts of the others. And have a set of houses with no note on them. Imagine that.

  • Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
    2y

    @Jorge Vazquez my experience has shown me some properties bring good tenants and some not so much. I have sold the ones that have attracted troublesome tenants and have kept some indefinitely that have good solid people. I provide housing and have great tenants I will keep as long a possible.

    Nice thing about RE is if you want to sell you can and if you want to keep it is all good.

    Actually selling later in life can be like enjoying the frosting on the cake. Some will sell on payments and increase their income enjoying a down payment and earning back the interest they paid as a buyer.

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