The number one mistake new investors make is not having more then one-exit strategy when buying real estate. It is very easy to map out a plan B or another exit strategy. Today we are going to give you some options and different exit strategies when investing.
Exit strategies--Always have a Plan B
While speculators rely on the "greater fool" strategy, flippers tend to have one of two exit plans:
1. Quickly flip the title to another investor, this is assigning the contract to another investor for a small fee.
2. Rehab and sell the property to an end user.
3. Rehab a property and put tenants in there and collect rent.
While the lion's share of the profits go to the retailer, a quick wholesale deal can free up your cash (and energy) for the next deal. But what if neither strategy works? What if the market really crashes and the buyers disappear? Is all lost? Of course not!
For complex economic reasons, the rental property market does not always correlate with the housing market. In fact, they are often counter cyclical. Currently we are in the high rental part of that cycle. Although most flippers are not terribly interested in being landlords, generating rental income from a botched deal is a solid backup plan. A lot of investors will also do a rent to own or lease option on a property they did not sell retail. This is a great way to make even more money when you sell to the people doing a rent to own. You cut out realtor fees when done this way.
To get a free ebook on the basics of doing a short sale just click on the link to the website listed. I have been investing for 10 years in real estate and I hope my knowledge helps. http://www.nobsshortsale.com
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