Real estate investors interesting in flipping properties can sometimes be wooed by the lure of getting involved in an investment opportunity and all of their energy goes toward landing that opportunity and working at it to improve the property. However, the biggest aspect of a real estate investment is not finding the opportunity, but getting rid of it to land either a profit or a loss for your substantial efforts.
After weeks and months of careful planning to land, develop and obsess about your investment, it then becomes time to get rid of it and move on to the next opportunity, netting a healthy profit (ideally) in the process. Before ever getting involved in a particular property, you should have a strategy on how to get rid of it, the potential price you are looking to aim for and a target of the type of person or other investor you might be able to sell your property to.
The Speed Of Your Flip
For those flipping properties, the amount of time spent on the property can often define the exit strategy, solving a lot of the questions that come up during the determination of that exit strategy. Are you going to simply buy the home and get rid of it with minimal effort? That kind of speed would dictate little work done on the home and a target demographic of other investors that might want to fix up the real estate and sell it again.
If that is the case, think about contacting other investors as you go through the process of signing the papers to take on the property. If speed is your goal, be proactive in the demographic you’ve chosen to target (in this case, other investors), and contact them before you need to market your home more aggressively to get attention. As an investor, you have the potential to develop relationships with other investors and in cases like this short flip, those relationships can turn in to speedy transactions under the right circumstances.
A Longer Term Approach
Speedy flips are not applicable to every situation and sometimes work needs to be done on the property. For these types of real estate investments, the demographic can be entirely different and perhaps those interested in holding on to an investment property over the long term should be your target as you plot your strategy to get out of the property. This will ultimately change the type of phone calls you make, marketing efforts you take and the speed of the transaction overall.
For those transactions where work needs to be done and you are looking to sell to an investor that hopes to hold on to the income property for an extended period of time, you can afford a longer exit strategy. Phone calls to contacts in the investment industry can be helpful, but you should take more steps to get public exposure for the property. Sometimes, these sales can mirror residential transactions with yard signs and more mainstream publicity, fitting the demographic of a longer-term investor.
Get Out First
Before you ever make an offer on a particular property to flip or work on the property for a subsequent sale, decide how you are going to get rid of it and who you’re going to get rid of it to. The characteristics of the home will ultimately help you decide on the kind of approach to take, something that should be readily apparent as you sit down at the table to sign the papers to take on the opportunity. Early efforts to decide on a real estate exit strategy will pay off as you go to sell your investment, not only dictating the speed of the transaction but the steps you need to take to accomplish your investment goals.