I HAVE A LARGE STABLE REAL ESTATE INVESTMENT PORTFOLIO IN CANADA AND THE US. WHAT TO SELL? OR KEEP ALL AND RIDE IT OUT?

I don’t know how you rate the extent to which you have your total investment distributed etc. If anything NEEDS to be sold, the nonessential real estate will be sold first: Recreational, vacant land, building lots, all holding property that don’t cashflow etc. And you are right, real estate, typically is considered a stable asset, but is not immune to shifts and TIMING (OZZIE’s No. 2 principle). Sit back, take pen and paper and evaluate:

REAL ESTATE PORTFOLIO ASSESSMENT ACTION PLAN  (ANAYZE FIRST THEN ACT)

• If caught in a prolonged financial downturn get out of high-risk or underperforming real estate assets.
• Get out of leveraged properties.
• Explore sale with leasebacks to maintain liquidity.
• Explore private real estate capital for diversification and potential tax benefits.​
• Finally: Investigate underperformance, high risk, high debt, high maintenance, volatile markets, leasebacks, tax benefits/pain of sales.

Your aim is to preserve capital, maintain income streams, and position your portfolio for recovery when markets stabilize.

Sell properties that are:

1. Underperforming RE not generating expected rental income or experiencing high vacancy rates.

2. High Maintenance: Properties requiring significant upkeep or renovations, which can be costly during economic downturns.

3. Volatile Markets: Real estate in areas with declining property values or economic instability.​ Sell these assets to free up capital to cover losses elsewhere or to reinvest in more stable opportunities.​ But, remember, you know all your properties, pimples and all.

4. Lots of debt properties (high leverage) can kill you if rental incomes decline or interest rates rise. Selling these assets can reduce financial strain and prevent potential defaults.​ If not too late already (you can’t sell).

5. Analyze strategies with your professional. If you do not want anybody to know you own troubled assets, sell your income properties but lease them back from the buyer. This gets you  immediate capital to keep afloat while allowing continued use of the property, looking good and covering operating costs.

6. If all fails, there is private money. Currently, there is a ton of private capital looking for highly secure real estate assets. Interest rates may be higher than conventional, but beggars….etc.