Hi Graham. A few things stuck out to me with your latest post here.
Firstly, again, you cite issues and problems with your Los Angeles *residential* real estate as reasons for selling off all your real estate. This appears to me similar to "swearing off women" because one had a crazy ex-girlfriend. As someone who also owns Los Angeles real estate (not residential), I empathize with your issues. But, I'm slowly transitioning to other areas of the country - not abandoning the whole investment thesis altogether. There are no other investment classes that offer the "total picture" (tax advantages and leverage) that real estate does.
It's like saying, "I'll never invest in cars again because of that darn Tesla" - one bad investment shouldn't necessarily ruin the whole class for investing.
On that point too - cars and collectibles are not income-producing assets - they will appreciate, but when they stop, they need to be sold like any other investment. And cars are not super-liquid - they require a discount if one wants to sell them quickly. Things like Bring-A-Trailer have helped liquidity, but it's still not great. And the market seems to go up and down quite a bit depending upon the flavor of the week. I have a large car collection as well, so I'm quite familiar with this.
Finally - Bitcoin. I think it's run it's course. After 15 years, it still does not have any practical (legal) use case, there are way too many outside actors manipulating the market (Tether, Saylor), and it doesn't generate any income (like cars). I guess it's pretty liquid, so it has that going for it. All of the arguments that "bitcoiners" have for the asset class typically also apply to real estate and other real assets too (inflation, printing of money, etc.). Theoretically, the more inflation, the higher Bitcoin should be. But there are too many manipulators in the biz right now - they are skewing the results. Saylor himself accounts for a large portion of Bitcoin purchases these days, and his strategy seems somewhat unsustainable in the long run. We'll see - the fact that it's not income-producing is a big issue...
The California-to-asset-class leap is the part worth slowing down on. Regulatory risk in Los Angeles residential is real and well-documented, but that's a market and structure problem — not an indictment of real estate as a vehicle. The tax advantages, leverage, and depreciation benefits don't disappear because California made landlording a legal minefield. What changes is where and how you own. The point about cars and Bitcoin not generating income is the thread I'd pull harder — if the thesis for exiting real estate is risk-adjusted return and liquidity, it's worth asking whether a Ford GT or a Bitcoin position actually clears that bar any more cleanly than a well-structured rental in a landlord-friendly state. For people who've navigated out of high-regulation markets into other geographies — what's been the biggest operational adjustment?
Okay, so this comes back as 100% AI bot when plugged into the "checkers". No one talks this way - "high-regulation markets into other geographies?". But I will answer the last question regardless.
The biggest "operational adjustment" is learning to manage from afar. You need to have a team on the ground that you can trust and coordinate with. This will cost you some time and money, but it's the cost of doing business in one of the US states that have a friendly business climate.
Fair callout, Wayne — "high-regulation markets into other geographies" is exactly the kind of phrase that reads like it was written by a committee. The actual question I was getting at: when you moved into out-of-state markets, how long did it take before you trusted the team enough to stop second-guessing every repair call? That's the part nobody really talks about — the transition period where you're paying for local management but still doing half the work yourself because you haven't built the relationship yet. The leverage and tax structure argument you're making about real estate is the one I think gets lost in Graham's post entirely — California residential isn't the asset class, it's one very specific version of it with its own political weather system.
Great article - thanks for your transparency. Love your advice.
I think while I am still in a high growth mindset, I am going to keep building RE. But if I am fortunate to make it big like yourself, I think I would begin to simplify as well.
Side comment that shouldn't influence your strategy, but I remember 10-15 years ago everyone telling me 'it only makes sense that international emerging markets have so much more room to grow' --- yet USA outperformed. I'm glad I chose to bet on the USA and I will continue to do so.
The observation about emerging markets is one that doesn't get enough honest airtime — the "room to grow" argument has been compelling on paper for at least two decades, and US markets have quietly made that thesis look foolish cycle after cycle. The structural reasons matter: rule of law, capital markets depth, currency stability, and the fact that global investors still denominate safety in dollars. That said, 2025's international outperformance is real, and it's worth asking whether this is a genuine regime shift or just mean reversion after a long stretch of US dominance. The simplification instinct as wealth grows is also underrated — complexity has a cost that rarely shows up on a spreadsheet until it does. What's been the trigger for most people here when they decided to start simplifying rather than keep stacking?
The majority of our wealth has sat in the market for most of the last couple decades and has made us a nice enough return to start contemplating earlier retirement... And with none of the legal fees or other headaches of being landlords. I respect those who built their wealth with real estate but it was never for me. Interesting read on how you're diversifying. We've also started spreading out to some international and emerging markets to diversify. I'm still not willing to gamble on crypto but to each their own.
I completely understand your case for exiting the LA RE capital. However RE compliments a diversified portfolio of equities well amid the lower correlation. And there are plenty of signals that inflation will be relativity high in the coming years. This economic regime is positive for RE. Have you considered redeploying RE capital to less regulated markets outside of CA?
David's point about redeployment is exactly right, and it's the question worth sitting with here. Graham's case for exiting isn't really a case against real estate — it's a case against being a small landlord in California in 2026, which is a very specific and genuinely brutal operating environment. The $40,000 eviction math is real, and it's not hyperbole. But the leap from "California landlord law is broken" to "I'll take Treasury bonds instead" skips over a lot of geography. There are markets right now where landlord-tenant law is functional, insurance hasn't gone sideways, and the yield still justifies the illiquidity. The correlation argument David raises also matters more than people give it credit for — real estate and equities don't move together, and that's not nothing when volatility picks up. The honest question for anyone watching Graham's exit is whether they're reacting to real estate or reacting to California. Those are two different problems with two different answers. What markets have people here actually found where the operational picture still makes sense for individual investors?
Excellent write up Graham. I agree with most of the allocations, though I would trim the cash position even more. Consider some US/international dividend growth ETFs to hedge against tech as well.
Graham's California exit is worth taking seriously, but it's worth separating the California landlord story from the real estate story broadly — because those are two very different things right now. The regulatory and litigation environment he's describing is real, but it's largely specific to a handful of high-cost, tenant-protective coastal markets. Investors in the Midwest and Southeast are running completely different numbers with completely different legal exposure. The more interesting question buried in this piece is whether the equity he pulled out actually earns a better risk-adjusted return in Treasuries and Bitcoin — and that math changes dramatically depending on what he would have done with leveraged equity versus liquid positions. Swapping locked-up, leveraged real estate for 100% liquid assets isn't just a return calculation, it's a lifestyle and risk-tolerance decision, and it's worth being honest that those two things are doing a lot of the work here. For people who've been watching the California market specifically — how much of what Graham describes do you think is creeping into other state markets, and how much stays contained?
USA has outperformed the international/emerging markets over the last ~15 years (long run). Diversification is good if you are trying to limit downside.... but I am sticking with USA broad market ETF's to maximize gains. I realize it is a bet - not guaranteed.
Graham's California-specific legal environment frustration is real and worth taking seriously — but it's worth separating "California landlording in 2026" from "real estate investing" as a category, because conflating the two is how a lot of investors make the wrong call for their own market. The eviction cost data he cites ($1,500 to $40,000–$50,000) is a California story, not a Memphis or Indianapolis story. What's interesting about his exit isn't the asset class decision — it's the life-stage decision. When you're already wealthy enough that liquidity and simplicity beat yield, selling makes sense. That's a different calculus than someone in year three of building a portfolio. The private equity observation is the most underappreciated part of this whole piece — paper returns that you can't access aren't returns. What's been your experience with markets outside the coastal regulatory environment — does the landlord-risk math look different there?
When you say "international stocks" do you mean broad indexes like VXUS, or do you have specific securities in mind?
I've been totally out of BTC since October, and now we're experiencing our usual "Crypto Winter" just like we do every four years. I'll probably pick a *little* bit up in Q4 this year, but expect the returns to continue to decline each halving cycle. Perhaps in another decade, it simply won't be worth the bother.
Thank you for your continued efforts and transparency.
Hi Graham. A few things stuck out to me with your latest post here.
Firstly, again, you cite issues and problems with your Los Angeles *residential* real estate as reasons for selling off all your real estate. This appears to me similar to "swearing off women" because one had a crazy ex-girlfriend. As someone who also owns Los Angeles real estate (not residential), I empathize with your issues. But, I'm slowly transitioning to other areas of the country - not abandoning the whole investment thesis altogether. There are no other investment classes that offer the "total picture" (tax advantages and leverage) that real estate does.
It's like saying, "I'll never invest in cars again because of that darn Tesla" - one bad investment shouldn't necessarily ruin the whole class for investing.
On that point too - cars and collectibles are not income-producing assets - they will appreciate, but when they stop, they need to be sold like any other investment. And cars are not super-liquid - they require a discount if one wants to sell them quickly. Things like Bring-A-Trailer have helped liquidity, but it's still not great. And the market seems to go up and down quite a bit depending upon the flavor of the week. I have a large car collection as well, so I'm quite familiar with this.
Finally - Bitcoin. I think it's run it's course. After 15 years, it still does not have any practical (legal) use case, there are way too many outside actors manipulating the market (Tether, Saylor), and it doesn't generate any income (like cars). I guess it's pretty liquid, so it has that going for it. All of the arguments that "bitcoiners" have for the asset class typically also apply to real estate and other real assets too (inflation, printing of money, etc.). Theoretically, the more inflation, the higher Bitcoin should be. But there are too many manipulators in the biz right now - they are skewing the results. Saylor himself accounts for a large portion of Bitcoin purchases these days, and his strategy seems somewhat unsustainable in the long run. We'll see - the fact that it's not income-producing is a big issue...
The California-to-asset-class leap is the part worth slowing down on. Regulatory risk in Los Angeles residential is real and well-documented, but that's a market and structure problem — not an indictment of real estate as a vehicle. The tax advantages, leverage, and depreciation benefits don't disappear because California made landlording a legal minefield. What changes is where and how you own. The point about cars and Bitcoin not generating income is the thread I'd pull harder — if the thesis for exiting real estate is risk-adjusted return and liquidity, it's worth asking whether a Ford GT or a Bitcoin position actually clears that bar any more cleanly than a well-structured rental in a landlord-friendly state. For people who've navigated out of high-regulation markets into other geographies — what's been the biggest operational adjustment?
Okay, so this comes back as 100% AI bot when plugged into the "checkers". No one talks this way - "high-regulation markets into other geographies?". But I will answer the last question regardless.
The biggest "operational adjustment" is learning to manage from afar. You need to have a team on the ground that you can trust and coordinate with. This will cost you some time and money, but it's the cost of doing business in one of the US states that have a friendly business climate.
Fair callout, Wayne — "high-regulation markets into other geographies" is exactly the kind of phrase that reads like it was written by a committee. The actual question I was getting at: when you moved into out-of-state markets, how long did it take before you trusted the team enough to stop second-guessing every repair call? That's the part nobody really talks about — the transition period where you're paying for local management but still doing half the work yourself because you haven't built the relationship yet. The leverage and tax structure argument you're making about real estate is the one I think gets lost in Graham's post entirely — California residential isn't the asset class, it's one very specific version of it with its own political weather system.
Great article - thanks for your transparency. Love your advice.
I think while I am still in a high growth mindset, I am going to keep building RE. But if I am fortunate to make it big like yourself, I think I would begin to simplify as well.
Side comment that shouldn't influence your strategy, but I remember 10-15 years ago everyone telling me 'it only makes sense that international emerging markets have so much more room to grow' --- yet USA outperformed. I'm glad I chose to bet on the USA and I will continue to do so.
The observation about emerging markets is one that doesn't get enough honest airtime — the "room to grow" argument has been compelling on paper for at least two decades, and US markets have quietly made that thesis look foolish cycle after cycle. The structural reasons matter: rule of law, capital markets depth, currency stability, and the fact that global investors still denominate safety in dollars. That said, 2025's international outperformance is real, and it's worth asking whether this is a genuine regime shift or just mean reversion after a long stretch of US dominance. The simplification instinct as wealth grows is also underrated — complexity has a cost that rarely shows up on a spreadsheet until it does. What's been the trigger for most people here when they decided to start simplifying rather than keep stacking?
The majority of our wealth has sat in the market for most of the last couple decades and has made us a nice enough return to start contemplating earlier retirement... And with none of the legal fees or other headaches of being landlords. I respect those who built their wealth with real estate but it was never for me. Interesting read on how you're diversifying. We've also started spreading out to some international and emerging markets to diversify. I'm still not willing to gamble on crypto but to each their own.
I completely understand your case for exiting the LA RE capital. However RE compliments a diversified portfolio of equities well amid the lower correlation. And there are plenty of signals that inflation will be relativity high in the coming years. This economic regime is positive for RE. Have you considered redeploying RE capital to less regulated markets outside of CA?
David's point about redeployment is exactly right, and it's the question worth sitting with here. Graham's case for exiting isn't really a case against real estate — it's a case against being a small landlord in California in 2026, which is a very specific and genuinely brutal operating environment. The $40,000 eviction math is real, and it's not hyperbole. But the leap from "California landlord law is broken" to "I'll take Treasury bonds instead" skips over a lot of geography. There are markets right now where landlord-tenant law is functional, insurance hasn't gone sideways, and the yield still justifies the illiquidity. The correlation argument David raises also matters more than people give it credit for — real estate and equities don't move together, and that's not nothing when volatility picks up. The honest question for anyone watching Graham's exit is whether they're reacting to real estate or reacting to California. Those are two different problems with two different answers. What markets have people here actually found where the operational picture still makes sense for individual investors?
As a real estate investor… I’m a bit biased. But can understand the pivot from a lifestyle standpoint.
But how bitter was the pill to swallow in the form of taxed long term capital gains?
Excellent write up Graham. I agree with most of the allocations, though I would trim the cash position even more. Consider some US/international dividend growth ETFs to hedge against tech as well.
Love the take on Bitcoin. I’m long Bitcoin, couldn’t be more bullish on it.
Graham's California exit is worth taking seriously, but it's worth separating the California landlord story from the real estate story broadly — because those are two very different things right now. The regulatory and litigation environment he's describing is real, but it's largely specific to a handful of high-cost, tenant-protective coastal markets. Investors in the Midwest and Southeast are running completely different numbers with completely different legal exposure. The more interesting question buried in this piece is whether the equity he pulled out actually earns a better risk-adjusted return in Treasuries and Bitcoin — and that math changes dramatically depending on what he would have done with leveraged equity versus liquid positions. Swapping locked-up, leveraged real estate for 100% liquid assets isn't just a return calculation, it's a lifestyle and risk-tolerance decision, and it's worth being honest that those two things are doing a lot of the work here. For people who've been watching the California market specifically — how much of what Graham describes do you think is creeping into other state markets, and how much stays contained?
International diversification is a good move.
Reduces exposure
USA has outperformed the international/emerging markets over the last ~15 years (long run). Diversification is good if you are trying to limit downside.... but I am sticking with USA broad market ETF's to maximize gains. I realize it is a bet - not guaranteed.
Graham's California-specific legal environment frustration is real and worth taking seriously — but it's worth separating "California landlording in 2026" from "real estate investing" as a category, because conflating the two is how a lot of investors make the wrong call for their own market. The eviction cost data he cites ($1,500 to $40,000–$50,000) is a California story, not a Memphis or Indianapolis story. What's interesting about his exit isn't the asset class decision — it's the life-stage decision. When you're already wealthy enough that liquidity and simplicity beat yield, selling makes sense. That's a different calculus than someone in year three of building a portfolio. The private equity observation is the most underappreciated part of this whole piece — paper returns that you can't access aren't returns. What's been your experience with markets outside the coastal regulatory environment — does the landlord-risk math look different there?
When someone says the old world is dead and reveals the new map, ask whether they are investing capital—or monetizing attention.
Some portfolio moves are strategy.
Some are content.
Sometimes they are both.
When you say "international stocks" do you mean broad indexes like VXUS, or do you have specific securities in mind?
I've been totally out of BTC since October, and now we're experiencing our usual "Crypto Winter" just like we do every four years. I'll probably pick a *little* bit up in Q4 this year, but expect the returns to continue to decline each halving cycle. Perhaps in another decade, it simply won't be worth the bother.
Thank you for your continued efforts and transparency.