Many people enter the real estate investing business for the financial benefits this market offers – it’s no secret that the whole point of purchasing investment properties is to make money through appreciation or rent in the years to come. No successful real estate investor enters the market without establishing an efficient business model (plan) – hence, having exit strategies for rental property before even purchasing a real estate investment property.
What are Exit strategies for Rental Property?
As the name suggests, rental property exit strategies are plans for real estate investor to remove him/herself from a real estate investing deal.
Exit Strategy #1: Fix-and-Flip – This real estate exit strategy results in the highest profit margins. It allows the real estate investor to sell the real estate property at full market value. It involves purchasing investment properties that need repair (below market value), renovating them, and then selling them for more than the original purchase price plus repair costs.
Exit Strategy #2: Buy-and-Hold – This exit strategy is popular for real estate investors looking for passive income in a real estate property The real estate investor chooses to hold it for a period of time and rent it out to receive monthly cash flow (rental income). As appreciation and equity build up, you may sell these investment properties for a profit.
Exit Strategy #3: Wholesaling – A wholesale deal occurs when a real estate investor (wholesaler) acts as the middleman between a property seller and a property buyer. Basically, a real estate wholesaler finds and quickly sells a cheap real estate property for a profit margin. Real estate wholesalers place the investment property under a purchase contract and then sell this contract (or “assign” it) to the buyer for a small profit. This exit strategy is often used when real estate investors are just starting out and don’t have a lot of capital.
Exit Strategy #4: Seller Financing – This is an excellent strategy for exiting a real estate property while continuing to produce a profit. In this case, the seller finances the real estate investing deal and acts as a bank. The seller and the buyer exchange a promissory note, including an interest rate and a repayment schedule. This exit strategy benefits sellers as they are awarded monthly payments to cover the mortgage loan, and their return on investment increases through interest income.
Exit Strategy #5: Rent to Own (Lease Option) – This type of exit strategies allows the real estate property owner to rent the investment property to a tenant, but with the option to purchase it after a set period of time. In some cases, a portion of the monthly payments is put towards the purchase price of the home.
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CashFlow Chick and Coal to Cash Homebuyers, Inc. are owned by Paige Panzarello. She has been in Real Estate as a Landlord, Builder, and Investor since 1996.
We buy as-is. An investor will estimate the repairs needed to restore your property, arrive at an offer, and will purchase the property as-is.
When we buy houses fast, there are no fees! We don’t charge you a real estate commission, and we may take care of any other nagging financial problems such as back taxes, code violations, or past due water and sewer bills.
Paige also helps to educate people on the importance of Passive Income, deal evaluation, money management, how to wisely interact with money, and what the heck does a profit and loss and balance sheet actually look like?
