Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here
Pick markets, find deals, analyze and manage properties. Try BiggerPockets PRO.
x
All Forum Categories
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

All Forum Posts by: Ryan Fortier

Ryan Fortier has started 3 posts and replied 31 times.

Post: 3% return on equity - should I sell or hold?

Ryan FortierPosted
  • Investor
  • Bedford, NY
  • Posts 33
  • Votes 13

I need advice on whether I should continue to hold onto my investment property or sell and "buy up".

Here is the scenario. I own a condo in Brooklyn, NY, which I purchased at the end of 2008 for 940k.  Today it is worth 1.65M, so it has appreciated roughly 10% a year.  My positive cash flow is 2k a month.  My current equity in the property is 845k, which makes my return on equity a miserable 2.8%.  I ran numbers on if I sold it and repositioned that equity as a 25% down payment on new property. After commissions and fees, I'd probably walk away with 750k, which would buy me 3M in real estate. If I purchased the new 3M investment at a 10% cap rate, my pre-tax cash flow would be roughly 13k a month. I'm also leveraged into 3M in value, so if the market goes up 10%, I make 300k on paper vs. 10% on my condo, which would be 165k.  Selling seems like the smart move, but I hesitate because of the possibility of continued strong market appreciation for the area of Brooklyn my condo is located in.  Am I crazy to continue to let all this equity sit and only generate 2k a month?