What is Your Real Estate Investment Exit Strategy?

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Author: Gabrielle B Dahms

Gabrielle B Dahms is a real estate professional and a real estate investor with over a decade of experience. She is active in the San Francisco/Bay Area. Gabrielle knows the real estate marketplace, can communicate it, and devise the appropriate strategy with her clients. She is an expert in her field, who listens to her clients and who delivers.

As a serious real estate investor, you have a plan, know your target market, know the numbers, and have an exit strategy. All of those components announce to the world that you are a real estate professional versus a hobbyist. They set you apart from the competition. Let’s take a look at one of these components: the exit strategy.

What is an exit strategy?

Simply put, an exit strategy is a plan specifying the way by which an investor intends to get out of an investment. For a detailed definition go to www.investopedia.com.

While there are some people who consider appreciation a plan for their investments, counting on appreciation is a risky strategy and could even be considered speculation.

Remember that many people who bought property in the boom years in the mid-2010s have lost and are still losing money or are even loosing the property to foreclosure now. Unfortunately, that includes real estate investors.

Exit strategies are ways to mitigate risk considerably and it is prudent to have at least a couple of exit strategies in place for a real estate investment. Doing so allows for flexibility in different market environments, while still generating a profit.

Such strategies include:

                • Wholesaling
                • Seller finance
                • Lease options
                • Renting and holding
                • Refinancing
                • Selling the note
                • Rehabbing
                • Flipping
                • And many more

 

There is money/ profit in all of these strategies and employing one or several of them depends on your goals, your focus, and your plan. Just know that while rehabbing properties can be quite profitable, they are potential headaches. Make sure your comfort level is on par with the strategy you employ.

Having several exit strategies is a must in real estate investing because there are things that can go wrong. These include tenant issues, the inability to secure appropriate financing, market demand issues, buyer or lender back out, unexpected costs, declining real estate market conditions, and others.

In our series Anatomy of a Real Estate Deal, many essential aspects deserve their own article and a more in-depth treatment. Please keep reading and feel free to send us feedback at any time.

This article is one of several in our Anatomy of a Real Estate Deal series. Further titles in this series include: Evaluating Property – Is There a Deal?, Real Estate Exit Strategies, Real Estate Financing: How and Where to Get Real Estate Investing Money, More Important Real Estate Investment Considerations, and The Real Estate Investing Machine (Stay Connected and Repeat).

Please read any and all of them and send them on to the people you like and trust – anyone who has ever considered being a real estate investor or is one now.

Gabrielle B Dahms is an active real estate investor as well as a real estate agent with a decade's experience. She continually educates herself and applies her energy, understanding, knowledge, and love to serve her clients. Follow her on Facebook at http://www.facebook.com/pages/San-Francisco-Bay-Area-Real-Estate-News/161447533871389 and connect with her on LinkedIn at http://www.linkedin.com/in/gabrielledahms

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