Not everything will go exactly the way you want it to in your real estate business. Just when you think you have everything figured out, something will come out of left field and change everything. Whether you are trying to sell or working on a wholesale deal, you need to have some alternative exit strategies in your back pocket just in case. In a perfect world, you will never have to use alternative exit strategies, but it is far better to explore these options and have them ready than be left scrambling looking for a new path to take.
You should strive to get involved in deals that give you maximum flexibility and have the highest number of exit strategies possible. In the event that you have a deal that there is not a lot of meat on, you need to know your bottom line. If you are selling and have not gotten much interest at your current listing price, you need to know the bottom line price that you would take. The first move with any property you are selling is to lower the price. Nobody likes to make less than they anticipate, but at some point you need to listen to the market and bite the bullet. If you try to nibble around at your number, you will not get the interest you need and your lowering the price will have little to no effect. If you know your bottom line number, you can make a sizable enough reduction in price to still salvage something out of the deal before exploring other options.
If you have lowered the price to your bottom line number and still not received the interest you are looking for, you can consider renting the property out. The sooner you make this move, the quicker you will have money coming in. As many landlords have found out, renting is much more difficult than putting a sign on the front yard and waiting for rent checks to come in. You need to worry about getting a good lease in place, finding the market rent amount and possibly getting the property up to any local codes. This may not be what you were looking to do with the property, but by waiting for months for a buyer that may never come you lose all of those payments and still have to outlay money to keep the house lit and the heat on.
If renting is something you don’t want to get involved with and selling at your price is not an option, you may need to consider taking a loss and moving on. There are many instances where investors wait and wait for that one buyer to come along and save the day. When that doesn’t come, they could be facing foreclosure or have shut their business down to a halt. By taking a loss and moving on, you can turn the chapter and get your business started again. This should only be a last ditch strategy, but if it does present itself a small loss may end up saving you much more money than if you were to wait for an option that never comes.
Making the tough decisions are never easy to do. Knowing the best way to get out of a property is sometimes more valuable than knowing the best ways to find new deals. Once you find the best exit strategy, be ready to jump on it. Time is of the essence.