Real Estate Investment: When Do You Buy And When Do You Sell?

Sam Zell knows more about real estate investing than anyone else and according to him, it is all about timing. Zell sold his real estate firm Equity Office to Blackstone Group for $39 billion during the peak of the market in February 2007. This was just months before real estate credit markets begin to plummet.

Timing is really important and it pays to know when to buy and when to sell. Zell did this not just once but twice! At the end of October, his Equity Residential real estate fund sold more than 23,000 apartment units to Starwood Capital for $5.4 billion. His company plans to see another 4,700 units sometime soon. Most of the proceeds will be returned to investors next year in the form of dividends, an article from Business Insider revealed.

Zell's technique is to cash out of non-core assets and rather than re-invest, most of the cash is given to investors.

So how does Zell know when to sell?

REITs (real estate investment trusts) are considered to be lucrative sectors after the 2008 credit crisis. REIT prices are up 286 percent from their March 2009 low, compared to 209 percent for the S&P 500 over that same period.

According to Real Capital Analytics data commercial property values reached an all-time high on record in August--up 14.5 percent and even surpassing the previous numbers.

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