Should I sell my $500k worth of RE property?

Should I sell my investment property and slowly deploy proceeds into stock market over the next two years at this time of business cycle?

Would you rather own $500k worth investment retail multi unit property (something like in the pic) generating $32k gross annual rental income or $500 000 in cash to deploy in the stock market (or broader capital market in general) starting next month? I am in this situation and cannot decide which way to go. I have a buy offer on the property @500k USD. This is my current situation:

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26 yo, zero debt, no wife, no kids, no car, no crypto, net worth ~ $800k consisting of: $500k commercial real estate (100 % occupancy) ~ $2650 gross rental monthly income, $200k residential property (duplex) ~ $600 gross monthly rental income (i live in one part), $100k stock portfolio generating ~$800 in dividends monthly, university degree in finance & economics. My current annual expenses are around $8000, I reinvest the rest. My effective tax rate was around 13 % last year.

I expect recession in the next two years. If I deploy $500k into stock market over the course of next two years, my portfolio might lose 70 % and it might take another five years to get to current valuations, while all my current tenants have signed contracts expiring from 2023 to 2025, in other words, there is really small chance, I might lose that ~32k annual gross income in the next five to seven years, while increasing rent at the rate of annual CPI change. Should I sell my property for $500k and try to diversify in fundamentally undervalued dividend aristocrats and blue chip stocks?

>$32k gross annual rental income

bro thats fuck all you'd literally make a fuckton more having 500,000 in crypto

Keep the property, wait for the market crash, have cash put aside, buy in at the despair phase of the market, enjoy the rest of your life as a multimillionaire
It's not that hard once you have the money

Crypto is too risky for me, I hate margin and I hate price volatility and speculative capital even more. I am investing into fundamentally sound vehicles only, which discriminates cryptocurrency entirely.

I guess that's why you only have a 6% ROI.

The problem is that I may not have an offer at $500k in 2020, I might sell it for $300k, who know? The $500k offer I have expires in the next 10 days, I have to decide. Market is rather small, there are not enough buyers at this price range and location. I have waited almost one year to find buyer with offer this high.

Yes, that is true, I plan on to buying triplex with mortgage in three to five years to leverage myself a little further and get higher returns.

Actually I just saw that it's the gross income, that's pretty terrible unless you have negligible expenses.

If I have under 5% ROI I'll get out. But I'm not completely risk-averse and know that it's better to manage risk than avoid it entirely.

I have bought it for $200k in 2010. So it's actually ~16 % ROI based on gross income and original cost basis. The offer I have currently is at $500k, market went high over the last few years.

You not understanding crypto != crypto lacking fundamentals.

Yes, perhaps I don't. I am have very old school investment philosophy approach, it helps me sleep well in night. If I had anything above 5 % of my net worth in cryptocurrency, I wouldn't be able to sleep tight.

You should have some crypto. You have enough for a few bitcoins, ethereum, and buy HOT. You could buy 100 eth of hot and flip it if you can at the right time.

Right. But that is not my biggest problem at the moment. I have few days to decide whether to sell or pass on the $500k offer. This is half million dollar question I need to answer myself.

OP here,

it looks like, I'll have to try Jow Forumsfinancialindependence/ on reddit or biggerpockets forum. Community here is not experienced with investments and modern portfolio theory at tall.

wait!

CRE Professional reporting in.

Dude, that property is not paying you shit. An NOI of 32k is nothing to write home about. A 500K offer is a solid 6.5 cap deal, good for both sides. Take it and GTFO. When the recession hits (agree with you on that, bigly) use the returns to snatch up inevitably foreclosed properties. In the interim, eat the cap gains (don't 1031) and use your network to find someone more established and intelligent on crypto than Jow Forums teenagers lmao. or just hold cash so you're even more liquid in the coming recession.

If it expires in 10 days, you should sell. Buy property back in a few years. Invest in gold, silver, some good stocks, and buy some bitcoin and ethereum. Just hodl them for 5-10 years. Bitcoin will reach 100k or more in less than 5 years. Every time bitcoin was said to have "died" it came back harder.

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Thanks for the input! I have just decided, it is a solid offer and I have no problem with reducing my cash flow for few years in exchange of potential capital gained from stock market after recession is over. I am selling @$500k and will accumulate most of the cash to wait for allocation during severe market declines.

On the other hand if the buyer will decline the offer, I won't mind and will enjoy my conservative 6.5 cap rate over the next five years. I did not have problem finding tenants even in 2010 and 2011. Location, location, location.

I am selling if the offer still stands. I guess I will know the answer in the next five days.

I agree with gold, perhaps even silver, even though it is not that inverse correlated to market as gold, undervalued defensive and anticyclic stocks definitely, I'll pass on cryptocurrency.

no prob. how do you have so much capital at a young age? just curious.

anyway 6.5 cap isn't really that conservative haha, where is this property that you say that? Tells me good location in small state.

also, checkout Net Lease Advisor for the really joocy stuff. make it your goal to pick up something like that.

>retail rental
not
>domestic rental

what are you doing bro? the retail store is dead, replaced by the amazon model.

Hold the real estate and just wait. No one knows when next downturn is, but a good guess is within the next two years. When it’s clear the market is recovering, jump into stock. Again, when it’s clear. Don’t try and call the bottom. Just be safe.

No social life, no luxury needs, no vacations and middle class family that was able to save something up for its young generation. I was also very foolish and even more lucky when I was trading futures under my father's name with most of my savings during 2006 - 2009.

Will do, thanks again.

I had mostly pure retail back in 2010, now the tenants consist of automotive parts dealership, car repair shop, interior & furniture design studio, dentist and garden tools specialist. Amazon can't replace crafting skills businesses, specialists or services like hairdresser, gyms or restaurants. On a contrary I am long AMZN, while being long O, SPG, PEI or even CBL.

I have decided to accept the offer, it might still be declined by the buyer. At the moment, it really does not make much difference, the price is fair. Stock market is not totally overvalued and there are still some interesting spots to put your money into with considerable dividend yield and defensive characteristics to withstand the recession (AT&T, PG, Kraft Heinz and so).

>Crypto is too risky for me, I hate margin and I hate price volatility and speculative capital even more. I am investing into fundamentally sound vehicles only, which discriminates cryptocurrency entirely.

being safe is such a fucking meme my friend

500k is a good offer

Honestly with that kind of money you can be almost as good if not better off by just investing in safe stocks, but nobody knows what this market is gonna do next. Crash might be immenent, its shilled everywhere.

You can literally make 10x in crypto without much risk if you know your shit.

But if I was in your shoes, Id just diversify, buy dividend stocks, and use about ~100k to gamble for startups and new things. (try cobalt mining)

wtf is this larp? 26 yo and 800k nw lol?
rental properties yielding 6+% and stock portfolio returning almost 10% from dividends alone all while claiming to have a degree in finance.
lmao
t. someone who actually does have a finance degree

>being safe is such a fucking meme my friend

If you have no debt, own business or investments that is needed no matter what is happening, you feel safe. Cryptocurrency is not a necessity as opposed to rental space (residential or commercial) or classic production sectors such as food production or energy and utilities providers.

>try cobalt mining
I am not into gold digging in general. 9 out of 10 companies will become worthless. 1 in 10 might tenfold its value, that's not for me. I despise such risk profile.

>You can literally make 10x in crypto without much risk if you know your shit
I don't know my shit. By my standards, crypto is not even currency, I do not take it seriously. Blockchain is still in its infancy and experimental phase, it should have never been used to shill money from people. What we have is huge MLM ponzi scheme with no real value what so ever (try comparing VISA transaction speed with crypto).

actually seems like the real estate yield is believable reading the other replies here, guess US real estate just is much more profitable than european, but still that stock portfolio has to be bullshit, where the hell do you get 9.6% dividend yields?

I am sorry to disappoint you, I am currently doing MBA on top of that.

Fine, I believe you but answer the dividend question. Why MBA over Masters in Finance?

>You can literally make 10x in crypto without much risk if you know your shit.
Yeah that is fucking bullshit. It is not even easy to make 2x without risk in the current market

It's gross yield! Portfolio is about five years old. My main holding is New Residential Investment Corp. with cost basis at $12.5, current gross yield based on cost basis is 16 %. Other holding are combinations of dividend aristocrats, tech value stocks and high yielding dividend stocks.

LOL YOU BOOMERS ARE SO STUPID

lots of coins have faster than visa speeds, its about developing and integrating. Bet on companies that will do that successfully and you will make millions.

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No dude. Crypto lambo dreams are the meme.
Is 'making It' possible? Sure, but not probable

MBA is professional degree, MSc is academic degree, I want to have both. It's as simple as that. I am not interested in PhD or DBA though. Perhaps CAIA or ACCA in the future, but only if I was bored.

Personally I would keep the real estate but I am a little biased, I love re.

The stock market has been shaky lately and if you were to move in right now then it is very likely you will see some short term downturn.

LOL you boomer faggot think your altcoins are going to replace visa?

I see, but that is a pretty high risk portfolio then. But I guess since it is only 100k of your NW it doesn't make that much difference on overall risk

I will let the buyer decide. If he accepts $500k on paper, I will roll on into capital markets (mostly stocks) will accumulate cash and deploy it slowly on declines. If the buyer will not accept or will offer less, I will stick with real estate. Either way, I am fine with my decision. There is not much to lose in RE, only opportunity costs from potential gains in stock market after recession is over.

It is, I am currently slowly trimming interest rate rising averse and recession sensitive stocks while rebalancing portfolio with more defensive stocks such us AT&T.

nice, I'm currently almost all cash, not sure what to do except slowly DCA into the stock market. Would be fucking pissed if I was exposed to the recession because of impatience but ofc it would also suck to sit in cash waiting for a recession that might not come for several years

>Cryptocurrency is not a necessity as opposed to rental space (residential or commercial) or classic production sectors such as food production or energy and utilities providers.
whatever is efficient must become a necessity through competition alone, the only question is WHICH crypto brings and actual improvement, this is called "use case" in the community. Most are shit, I can agree to that.

>If you have no debt, own business or investments that is needed no matter what is happening, you feel safe.
Yes, with "being safe is a meme" I wanted to indicate that the most profitable investments are usually connected to high risk in one way or another.

I made several 2x and one 10x in current market, never lost any money. If bullrun is coming, 10x will be easy.
Im not saying 10x is easy, im saying its possible without much risk if you know your shit, aka can pick the fotm-coin before anyone else
just look at holochain. That shit was easy to call because everyone on Jow Forums is losing their minds over it even prior to trading starting

True they are, and you are not wrong.
>being safe
is a meme in the investment community though
you never are safe, and you always risk something.
What does OP do if noone bothers to drive to his property anymore because entertainment cannot beat the internet, yada yada. I realize im being futuristic here, im just saying I likely wouldnt hold property for annual return of a little over what dividend stocks could give me if I have to administer it and bet on it not losing value, which is not so secure to me at this point. 500k is a very nice offer, Id take it in a heartbeat instead of being chained to that thing

Sure, but you probably are not playing around with 800k

which state/City?

if in NYC, you can invest in Condos and double your earnings

Gold stocks and oil stocks op.

Of course not. If I had 800k Id be playing with what im willing to lose. 100k at max propably.

The thing is, if you dont have money, you HAVE to take risks. You wont go anywhere investing in dividend stocks.
I started with ~3k back in 2016 just with stocks, went up to 9k, then lost 6k in margin trading in a very painful lesson about ~4 months ago, now im back at about 6-7k with 80% of that in crypto, and gains exclusively in crypto, the stocks I put 2k in for holding long are not even close to taking off. I expect crypto to at least 2x this year as entire market, some of my investments already did this.

Im hoping to gain enough experience this way trading highly risky assets that, if I ever were to get to 800k, I could double it reliably in a year using shotgun method. God knows that kind of stuff is easy with crypto right now. And its easy when something like the Oilcrisis happens. Easy when markets crash. Its easy in something, every year. Thats what investment is about to me. I could never be on ease with holding 75% of my portfolio locked up in real estate alone. Thats why I think you should sell. Diversification with your numbers is much easier in stocks, much more hedged against disasters if you go into the right stuff, and you are much more liquid to "play around" like me should you ever decide that maybe you do wanna invest in something risky. Which is certainly can recommend, loads of fun.