Real estate investors fear divorce asset hiding

“And if you put all that in NVDA you would have had 160 million. [re: Real estate or stock market? Let’s do the math]”

“What does the rest of the asset pool look like? Do you have a way to divide so that you can potentially lean into some of those other assets to come up with her share of the equity? I mean assuming you're dividing the estate roughly 50/50, she gets $170,000, but could you potentially transfer a larger portion of a retirement account? She probably wouldn't agree to it, but could you do a buyout with larger monthly payments over the next handful of years?”

“I've only known one guy that got to that level and he was strictly focused on apartments. He got over 5000 units before selling nearly all of it for 146M. He was a deal hound and his wife struggled to get him to stop but thankfully he did so he could spend time with his kids. Now he helps teach others what he learned along the way.”

Just wanted to follow up on this, do you regret the decision?

“That's a fair point and one I'm aware of in not negatively impacting long term relationships with my siblings. I think today, if my siblings were getting a check for $200k they might be ok but yeah, if I sell it in 20 years for $3mil they'll feel like they got bamboozled. Yes, I am looking to optomize for myself (and my wife/kids, my family) so my idea is yes, obviosuly I'm doing something that is in my best interest, but my siblings are rewarded with cash today. I think all of t”

“With depreciation pay back and capital gains, this 75% might look a lot less. It’s difficult to reason selling an asset when you truly breakdown the numbers.”

“Not familiar with that. when we got them I was making 75k so my primary interest was cash flow and appreciation. Thanks for the heads up though. I'll check it out.”

“Nine years of negative cashflow doesn't erase 75% appreciation, that's real equity. Most people regret not having a 1031 plan ready before they close.”

“I sold three houses this past year and took my money to Central America, currently under contract on an apartment building here”

“Sort of. It’s also the same exit method we have for someone wishing to retire. Clear and predictable results without heartache. And “reasonable timeframe” should always be spelled out as a time that makes sense for the investment. 60 days is no problem for a small contract. A big one that’s barely enough time to get valuation done”

"Put it in the S&P"

“Nope. Never said guarantee. But if you want to invest like the S&P over the next 40 years is risky feel free. I also didn’t say it was the only option. Just what I’d do.”

Excuse me but why will you have to pay taxes on YOUR equity in the home?

Idts that's a good idea

“If one of the spouses was still living in the home, its as if both were once the divorce is final. That said, the facts don't address if either spouse is in the home now.”

I’ve had exclusive use since filing for divorce.

“As I said, they substitute for a separation agreement. They are considered the equivalent of a separation agreement. As I said, I have been through actual audits with clients on this one. Some divorces just take a long time and there is ample evidence of that long process.”

“Well okay, but I don't see "pending divorce proceedings" as an exception written in the law.”

“Good afternoon guys, For context, I am in California. I filed for divorce in 2023 and been fighting to buyout the other party through a refinance. After almost 3 years of back-and-forth, she filed an RFO to force the sale of the home. The house will be listed at some point in December. Because of her refusal to sign any marital agreement until the house is sold we are not divorced until the house sells. The last time I sold a property, I was able to avoid capital gains because of the exemption,”

“Let me see if I got this right. You're going to sell income property to invest in Wall St which is in a bubble looking for a pin”

“You’re likely not comparing Apples to Apples here… what’s your annual net return on the real estate?”

“I have started studying real estate of top major cities in the whole world and have realised one thing , they are very much likely to beat index returns in the long term Index investing doesn't give you much dividends but with real estate you can consistently get high returns and with that rent possible loan too That being said, DIVERSIFY!!”

Awn

It will always be a sellers market

“By that logic you should only invest in assets with the highest rate of return. Fuck diversification - YOLO it all on meme stocks. After all, the low return on bonds is just consumption in investment's clothing.”

“Yea true but I’ve also seen some multi families that don’t pencil much better”

“Real estate has cooled while the stock market is red hot right now, I'd be careful moving money. Also consider tax implications.”

“Before treating this as a binary choice between keeping the buildings and moving everything into the S&P, I would separate three decisions: whether you still want real-estate exposure, whether you still want operating responsibility, and whether you need liquidity. For each building, calculate the current return on equity using realistic NOI after repairs, vacancy, management time, and near-term capital needs—not the return on your original purchase price. Then compare that with the after-ta”

“I would say we're going through the same thing and selling our properties in Florida but we're actually moving them to another state instead of putting them in an S&P 500. I think there are still other places all over the country where you can find a good return on your money. You just have to find somewhere where rents are pretty solid, the insurance is not crazy expensive, and the taxes are low. Can that change in the next 5-10 years? Absolutely but that's how you keep the mone”

“I bet they find out how much equity she has in the house when they get divorced.”

“Well, when they get divorced half the house is hers and he can buy her out, also half her bank account will be his as well, same as his bank account. Very few people in this thread seem to understand how marital assets work. Doesn't matter whose name is on what. They are married they both own everything equally. Get divorced and this is the first thing you learn if you haven't.”

Pleasantville

“It's not the risk, it's the return on effort and assets, which has diminished big time over the years. And it was the ability to find below market deals, which cannot be done in stocks, but absolutely can be done with real estate - but those days are gone too, everything is overpriced by any metric especially yield. I made $1,000,000 on one crappy split level house I paid $400k with only $50k down, did some light remodel, rented for 17 years, sold for $1,400,000. Tenants paid the mortgag”

“The stockmarket will get a correction at some point, my RE won't. RE depends more on the place/ country you live in. My RE definitely outperformed the markets, and that doesn't even take into account my RE is leveraged through a mortgage, than it would beat the markets by a lot.”

“This guy land lord's. Such a pain in the ass to maybe make 10% a year? Just buy index funds and be done with it. Infinitely less risk.”

“Sounds like a hassle to maybe make 10%+ and beat the market. Infinitely more risk. Look at all the other commenter saying RE is a dead end now. Invest instead!”

“Cash-flow generating (which grows with inflation), value (in a lot of places) grows with or even outgrows inflation and especially in good locations where nobody can build (/print) more supply. And even if the world turns to absolute shit, people will always need a place to live so it still holds value even if the main currency turns into food. I like it in the mix.”

“The S&P and the stock market are great ways to grow wealth, but also subject to downturns. Keeping 1-3 buildings would help protect you from downturns in the market.”

Ok do you want to shoot me a message to talk about the property?

“RE is providing a real value, but it comes with work and can be worth it. With the markets a passive investment, based on the past returns, I think the returns will continue to be the same. Depending on your strategy, time horizon, the markets can return more than RE.”

“But money in the market compounds in perpetuity. Your tax write off is a one time deal. What am I missing?”

“Stocks are inherited at a stepped up basis also. I'm just a dumbass who places a value on my time rather than dealing with some jerkoff renter or contractor or filing taxes or rental agreement. More math less name calling please. I like RE and own 9-units. I wouldn't do it again though.”

“I also see a 5 to 10 year shift, not a pretty one, may pick up some more then at the "death tax" festival”

“What's your exit strategy to not get hammered with taxes or just hold til you die?”

“Not for everyone but the stock market has plunged more than 20% in a single year approximately 30% of the time since 1928 (fact check me) vs the housing market have a single rough patch since 1880. Housing is farm more predictable than stocks.”

“You start with a 3.5% down payment loan with Fannie and you buy your first home and have renters move in with you to pay the mortgage. Appreciation and improvements allows you to refinance and buy the next one. Or if you are older bring in partners like I did. RE can generate generational wealth and no it is not as simple as stocks, but after less than 10 years I am refinancing properties And buying new one’s with my accrued appreciation. The numbers can be staggering, however it is not passive”

Can you afford to hold? A few years more might make a big difference.

“That is why in our model, cash flow is calculated at 1%, because of expenses. Also these expenses in many cases create forced appreciation of the asset. Remember leverage is the key!”

“OP here. - I would have to try to sell as a portfolio and then pray that I can quickly find something that even comes close to cash flowing”

“You are right, property value seems like so much on paper but when you cash out , lots of that value is cut in half. VOO set and forget”

“Simple math for everyone on this thread. You invest $100K in the market and make 10%, you have $110K after year one. You buy a $500K property and put 20% down which is also $100K. The property appreciates 3% annually, which is $15K on a $500k property. You make 1% cash flow or $5K, your principal pay down is 1% or $5K which comes out to $125K after year one vs $110K and the disparity only grows from there. Because of depreciation and a lower tax threshold, real estate is taxed at a much lower ra”

“Leveraged tax advantaged returns, appreciation, stable growth, cash flow, etc..”

“Why would anybody bother with real-estate when they could buy stocks at the click of a button?”

“Heloc, extra payment, 30 year death notes and Refi is very risky, IF you do not know what you're doing. Same Same, but different.. Stocks are massively better as an investment and asset.”

“Also shrinking RE portfolio, Stocks, Tis the 2nd best investment for past 40 years”

“I’m in similar boat, MM payout once all my RE sells. I’m out of the RE game after all of this, broad base index funds from here on out. Tired of dealing with all the stuff that comes with being a RE investor.”

“To compare the potential long-term returns of investing the proceeds based on historical average market returns versus holding onto the house as a rental property, while factoring in potential property appreciation, maintenance costs, rental expenses, vacancies, and the time and headaches associated with being a landlord.”

“Right, if the value of the property goes below your debt, you’re good as long as you can keep paying the mortgage. If the value of the stock goes below your debt, you get instantly liquidated and take a 100% loss. Oof”

“You can borrow against stocks just like you can against real estate. One lending product that allows you to borrow against a portfolio is known as a SBLOC, or Securities Based Line of Credit. Many stocks also pay dividends, providing cash flow. Also, saying that RE surpassed stocks is a bit vague. In what time period and under what circumstances? I would argue that investing in an S&P 500 ETF had much better gains than real estate, even after accounting for cash flow from RE.”