- In fact, if you can set yourself up with the proper planning, you can almost essentially guarantee yourself to at least break even, and never have to take a major hit. In order to guarantee this, you must be aware of the different strategies that you'll need to prepare for in order to avoid major losses in the real estate world.
- In this article we will highlight the top 5 exit strategies you should have as your plan B in order to “Get out while the getting’s good”.
1. Bundle Of Joy
One strategy you can choose to adopt is by bundling multiple properties together into a package deal for a buyer. While the market for bundled properties is smaller, it allows you to focus all of your marketing efforts on one sale. Thus, eliminating the stress of having to sell multiple properties individually. The only downside to this strategy is because you have such a limited pool of qualified buyers, it could take a little extra time to sell. However, the payout could be worth the wait, and you save yourself money from marketing multiple properties.
- 2. Sell It At Auction
Often times selling a property at auction it is not the most feasible or desired option for an investor trying to unload a property. However, if time is of the essence an auction might be your best bet. Be aware though you will probably not get top dollar for your property. And instead, you'll more than likely break even. While there have been instances where a property will go for above market value, this happens to be an exception in rather than a rule. Also, make sure that if you decide to auction off your property then the auction house you choose to go with is reputable. There's a good chance that you will not have a ton of options when it comes to auction houses or auctioneers. So, do your research and choose the best one available in your market. Make sure that you talk to the auctioneer about their fees, marketing period and sale date, and an estimated price range for your property. Ideally this should be a last resort method, but if you need to sell quickly this will probably be the way to go.
3. Utilize A Real Estate Agent Who’s Focus Is Investors
More than likely your common everyday real estate agent will not be helpful when trying to unload your property quickly. In fact, they may just hinder the process and get in the way. However, if you can find a real estate agent who focuses specifically on selling to investors, they will be able to not only help you sell your property. But, they will be able to sell it for you quickly. This is because they already will have an extensive list of every investor in a certain mile radius on speed dial. And if your price is fair, you may even be able to have a contract on the same day that you list it with the real estate agent. The one downside to this method, it is like with the auction house, you may not get top dollar. After all an investor is looking for a deal. But, this is another option where you can at the minimum break even, while selling your property quickly. So, do some research and find a real estate agent near you who specifically deals with investors.
- 4.Go Old School
Another option that you have as an exit strategy is by going old school and selling it yourself. For instance, if you aren't willing to pay the real estate agent's commission fees, you can try to list your property on a flat-fee listing service. This way, you can reach a large audience, but aren’t paying ridiculous amounts to do so. Also, you can utilize social media platforms like Facebook. You can post details of your property on different forums, and utilize other methods, such as multifamily leasing technology if you’re trying to sell a multifamily unit. You can go even more old school yet, and post flyers around town in local gyms, grocery store and coffee shops. This may take more time, but you can save yourself a bundle and get the price you want.
5.The Great Lease Option
Only use this method if time isn’t a factor. Essentially, what a lease option entails is you sign a lease agreement with renters, who have the option to buy the property for a specific price within an allotted amount of time. Just make sure that if you choose this option, you don’t allow an extensive amount of time. Otherwise there is no sense of urgency, and appreciation of the property may come back to bit you. The benefit to this option is that it produces cash flow. And as a real estate investor, you know that cash flow is king.
- Regardless of what your exit strategy is, you just need to have one, at least one. If you don’t, then we suggest you stop everything, and figure one out. By having an exit strategy you can save yourself from taking a major hit down the road. So, do your due diligence and research, and find out what exit strategy is best for you. Trust us when we say, it’ll be one of the smartest things you’ll ever do.