Sell Or Hold Plots

Jeremy has two plots of land in Florida, but it's a risky property. Dave tells him to wait a year and then sell them.

QUESTION: Jeremy has bought two lots in Florida and the appreciation is fantastic there right now.  However, he has borrowed money invested in risky property.  What should he do?

ANSWER: Make some profit over the next year and then sell the properties.  The most risk you can possibly take in real estate is to be a developer.  The second most risky real estate move is resort-type property.  There’s no middle ground – you’re either going to lose everything or make a killing. 

If you’re going to invest in resort property, it should be a very small percentage of your investment and paid for with cash.