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So we talk a lot about when is a good time to buy commercial real estate, but what about the other side of that? When is a good time to quit the business and move forward?
Number one, when you’ve exhausted all of your efforts and you just are not making money. It is very hard when you’ve put time, blood, sweat and tears into your investments. However if it’s not working, if you made some bad decisions in the beginning, sometimes it’s better to cut your losses and just take some time out to figure out the next step.
Number two, when you’re ready to no longer be an active investor. You know that happens, you know some people think people want to buy commercial real estate to give it to their kids but it all doesn’t always mean your kids want to be investors. Sometimes your kids just want to be who they want to be, sometimes that’s a lawyer, a doctor, or someone that has nothing to do with commercial real estate. So if your asset isn’t going to be left to a party that truly wants to be in this business, it may make sense to transact on your property in advance and leave them something else. Invest in a REIT and that way they’re able to see the value of that investment long term without necessarily the involvement they would need to have.
So if you are looking to continue to invest or leave the business, take time. Don’t rush into the decision. Take time to truly assess all the benefits and the challenges in this business before you make that critical decision to sell because selling at the wrong time could be one of the worst decisions you make.