Exit Strategies

That's what it's all about, isn't it?  I mean, you get into real estate not because of your love of brick and mortar but for the rewards - the benefit of ownership during and after the term of ownership.

Investing in real estate presents a multitude of opportunities where you can put your money. You can invest in single-family homes, single condos, duplexes or 4-plexes, office buildings, retail shopping centers or even storage facilities which are also doing well nowadays. If you are new to this time and money-tested trade, you must understand that there are a number of strategies that you can use to bring in profits. Most real estate experts call it exit strategies, and examples are buying low and wholesaling for fast cash, buy-and-hold for cash flow and capital appreciation and to buy-fix-and-sell for bigger profits.  But you have to start out right.  Let's cover some of the basics.

Buy at the right price

Getting a bargain now will help you to weather the fluctuations in property value over time so you can profit when you eventually sell it.  Homework is necessary. You need to develop an understanding of what constitutes a bargain price in the area(s) in which you wish to invest.  As an investor, you'll need to be able to act quickly once your target is in sight and knowing the market and having the right contacts - whether an agent or directly with the banks will certainly help. Get to know the market and the people within the market.

You also need to study rental prices of comparable units in the area, getting a feel for supply and demand trends. The local classifieds are a great place to start and a few hours of research should give you a good basis for determining what you can charge. Just make sure to factor in for utilities (electric, gas, oil, water, sewer, cable, etc.) if they’re included.

Depending on your personal goals, there may not be enough of a spread between what you will pay out monthly in mortgage, taxes, and utilities and what you can charge. Figure out what your spread needs to be, and analyze every house you consider against this amount.  Of course, a bigger spread is preferable, as it means more profit. If you’ve got a few good options to consider, that spread can aid in your decision-making.


(My next posting will cover how to check out and be sure you're in the right area of town so please come back soon.)


Are you looking for US investment properties? Are you looking for a discounted short sale or bank owned property or just have a question?  John Breaux can be reached at johnb@southernreo.com or  +1 504-208-4331.