Bulletproof Your Real Estate Investment: The Power of Multiple Exit Strategies

When you buy an investment, do you have multiple exit strategies?

I hope so.

I’m going to give you a few ideas for multiple ways to get your money back from a real estate investment.

**

Imagine buying a house to flip and doing amazing renovations to target a high-end buyer. Then, suddenly interest rates go up or layouts start to happen.

Now, buyers are nervous, or they can’t get loans. Suddenly, no one wants to buy your house.

Yikes!

That’s a lot of money and a lot riding on selling that house.

**

If you had multiple exit strategies, there would be no panic. You would simply pivot to your back-up plan (or plans) to preserve the investment and get your money back.

Markets change. Some real estate falls out of favor, usually temporarily. Some price-points also fall out of favor.

You need different options for the success of the project. It’s best to have these options planned in advance.

But, sometimes the unexpected happens and we need to pivot quickly. Anyone remember 2020 or the recent interest rate hikes?

Yikes! Those events will test an investor’s nerves and creativity.

**

Here are a few ideas for multiple exit strategies.

Median-priced flip: If you can’t sell, rent the house until the market rebounds, then sell. Bonus: It will save you money on short-term capital gains taxes.

High-end flip: Convert to a luxury AirBNB.

Apartment Buildings: Sell, refinance, upgrade to luxury apartments, convert to AirBNB, focus on housing voucher tenants.

Office Buildings: If you can’t lease, convert to residential units, convert to storage lockers.

Hotel Buildings: Convert to apartments (way easier than for an office building) or a hybrid hotel/AirBNB (use no check-in personnel to reduce expenses).

There are so many options. Be creative.

There is always a preferred use and exit strategy for your investment. But, it doesn’t always work as planned.

Having backup options enables you to preserve the investment, hopefully until the preferred exit is feasible again.

Happy Investing!