Exit Strategy

Your Exit Strategy ties directly into why invest in real estate.

Many would be investors say I want the property to generate cashflow. Others say I am looking for appreciation and still others say I'm interested in flipping the property.

Everyone of these types of investors need an exit strategy.

1. The Cashflow Crew: You are looking for cashlow on a monthly basis. Part of the benefit of montly cashflow is the phantom loss of depreciation. You may want to invest in larger deals and need to plan a 1031 exchange or you may simply not want to fix any more toilets. Either way you need to look at the future of each property you purchase and how it fits into your overall goals. Then plan yor exit strategy.

2. The Long Term Appreciation Group: In order to cash in on that wonderful appreciation you need to refinance the property, sell the property or do a 1031 exchange. When will you need to do this. How does this property fit into your goals. If you plan the exit strategy before you buy the property you know better if this particular property fits into your goals.

3. The Flipper: Your exit strategy comes before the others. What work needs to be done before the property on the market? What can I sell it for at that time? Will I sell it myself or utilize a REALTOR?

Bottom line if you are going to buy property plan your exit strategy for that property before you buy. Otherwise how will you know that the property really fits into your goals!

For more information on Exit Strategies visit Real/Tax