4 Common House Flipping Exit Strategies
In real estate investing, especially house flipping, almost everyone is focused on entry strategies as opposed to exit strategies. Most of the people are aimed on how to find property to flip, how to work with wholesalers, working with real estate agents, etc. Having solid house flipping exit strategies can be a life saver but regrettably, they do not always guarantee things which you hadn’t expected. Exit strategies are simply back up plans. So if things do not work according to you, you have a plan B. The excitement of purchasing a flat or house and rehabbing it is too familiar. Some of the House Flipping Exit Strategies are:
You might face a buyer who wants to purchase property but they are not in a position to get a customary loan. They have a fixed source of income but aren’t able to meet the price you want at the moment. A lease option is a good way of getting clients to agree to your demanding price without making them feel like things are going away over their budget.
Break Even Price
You should be prepared according to lower your price in such a way that you only lose a little money or break even. Indirectly, you should not lower your price such that it is ultimately disastrous to your business. You can think of price reduction by calculating your monthly carrying costs. You should also know the exact date when your loan matures and think accordingly.
If leasing doesn’t work for you, you can always rent out the property. You can rent it out at current market rates. This can be very profitable especially if there is a demand for rentals in your residential area.
Sometimes you just have to accept a loss when you try all the exit strategies and they do not work for you. You just have to learn from your earlier mistakes and make better decisions for the next time.