What are the exit strategies for real estate

📈 Ready to excel in real estate investing? Unlock the power of exit strategies with our comprehensive guide! 💼💰 In this video, we dive deep into the various exit strategies for real estate, helping you make informed decisions to maximize profits and mitigate risks. Whether you’re a seasoned investor or just starting, this step-by-step breakdown will equip you with the tools to succeed in any market. Check this video to know more.

I’m going to show you how if you have a house right now that you’ve flipped, that’s not selling how you can use batch leads to determine what extra strategy you should do, guys, I have two flips right now that are not selling, I’m not going to flex and be like, Yeah, I can sell everything and anything right now, Utah’s market. Unfortunately, prices were super high. Now people aren’t buying because the price ranges are still high, but the interest rates are like 678 percent. So a lot of people aren’t buying as much. So I’m going to show you how to break down what the heck you should do if you have a house that you’re making hard money payments on how to use batch to determine what the heck you should do. All right.

What is going on with my flips? Okay, guys. So I will tell you right now that I have never been in a situation like this. I’ve been doing real estate for about five years, and the market ever since I’ve gotten here has either been consistent or has gone up. Okay. So like four months ago, I bought two homes, okay, actually, at three flips going, they just got finished beginning on flip like maybe a month or two ago and they’re not selling okay. And I’m not prideful enough to say like, oh, yeah, I can sell everything anything like stuff happens next. So what the heck do you do when stuff happens? What are you going to do about it? So I had to run math for the first time to find out what my exit strategies are on this house that’s not selling because right now I have a hard money loan on one property, I borrowed about 366,000, the ARV was 500,000 at the time, and we put in about 40. So we were looking at making about maybe 50 to 70k. On a flip at the current market right now the house is not selling, and we have lowered it to 459. So if we did sell it currently at 459, we’d make a profit of like 20 30k. But it’s not selling. And if we keep dropping, it’s might sell who knows. It’s kind of a weird time. So we have a hard money loan on it. A

And right now what we’re doing on the hard money loan is we’re paying $3,000 of interest a month, I have to look at this. And I gotta say, What do I do? Okay, the house is not selling, I can drop the price, probably breakeven, but what’s what’s the best strategy, there’s three things, maybe even four things you can do. Option one, I’m going to write this out on my board. And I think this is extremely helpful to you guys, because I’m going to show you how I’m going to use batch to determine my best option. Okay, so I’m gonna write this out. So I’m going to show you guys on this board, what are the options here? Option one sell and lower price? Okay, so right now I have the the house that I currently have, it’s at 459. Okay, that’s what I have it listed for. So right now at 459. My break even at the moment with realtor commissions and fees, and all that stuff is like, let’s just say it’s 449 is the breakeven because I don’t want to get too deep in the math, but we owe the 366 to the hard money lender, we put in about 54k into fees and to repairing it, then we have the price, we have closing costs and commissions if we sell it, so let’s just say for 49. So at the moment, there’s about a 10k profit, if we were to sell it at the current price, we have it at okay, so I could lower it right and hope someone buys it.

Okay, that’s an option. So that’s option one. Something else you guys needed to know is if I have a hard money loan on this, which I do the Hard Money Loan cost is 3000 a month. That’s hard money. How long can I last doing this on the hard money loan before I start losing money, I have about three to four months of hard money interest before I don’t make a profit and I start losing money. So this option right here, it’s a three month option before I start losing money. So now we’re going to option two. So this is option two, everybody rent it out. So what that means is don’t refinance out of it. Don’t do a rate and term refinance to do a cash out refinance. just rent it out currently. Let’s see if Baskin helped me find out how much this puppy can rent for. Okay, so here is the proper team. So here it is. Okay, by the way, it’s ugly. It’s an ugly house, just the shape and everything, whatever. Alright, let’s see what bash has got for us. So I wanted to use bash to tell me what the rent was, but it’s not coming back on that. Hey, look, that’s my company. Everybody. Cool. Bash does a good job of pulling the right info. So let’s take this and let’s find out what Zillow says these properties in this area are selling for. We just dropped it. It’s been on the market for 48 days. So Zillow says the estimated payment is 4837. I don’t know if I believe that. So all you have to do on Zillow is go to for rent and let’s see what rents are going for in this area.

Buy my property. Alright, let’s just look around here. 2006 Okay, this one is smaller than mine. 2600 This is okay. So that’s kind of good news. It’s I mean, it’s not rented, but it’s saying 2600 Mine’s got an extra bedroom and bigger 2800 This is cute. Mine looks like that. But this was much bigger. So I’m kind of getting the vibe that mine is going to go anywhere between 24 and 28. So now we’ve looked guys at what, what the rents are in that area. So the rents in this area, that’s what Zillow says, Zillow said it is potentially 2237, we’re seeing for houses that are that size, we’re seeing 2400 to 2600 on rent. So what this means guys, is, if my hard money cost, if it’s $3,000 a month, and I rent it out, let’s just make it easy math 2500. And that’s what I rent it for, then I am losing $500 a month. So instead of losing 3000 a month on selling it and lowering the price, I’m losing 500 Because I can rent it out and pay my hard money lender. And 510k, I can survive for 20 months, my hard money lender will probably say, hey, I need my money, because I’ve already had this for six months. So he’s probably gonna say he needs his money in six more months, because he only does a year, but I have 20 months technically that maybe I could go to another hard money lender and pay him interest on it and just lose $500 a month, we’ve already gone off lowering the price renting out what’s the next option? Seller, finance, okay, let’s say 459, again, is what I need to be at to like breakeven, because there’s actually when you do a seller finance, when you do a refinance, you have to pay fees.

So it’s gonna cost me like 10k. Just to get the money out of the hard money loan, I gotta get it into a traditional loan, a normal like fake financing loan, I’m going to be in it at 459. Okay, if you guys are finding it hard to follow. Watch this again. Okay, so 459 is what I’m in and out, if I do seller finance, and I get a new mortgage on it, okay, so 459, they told me, the lender said, because this is not a personal residence, it’s going to be 8% interest rate, okay, that’s what’s your interest rate is going to be, so we ran the math on what he’s willing to lend me it’s going to be about 2500, just for the payment, that’s the mortgage payment, then it’s going to be about $300 on taxes and insurance. So we’re talking about 2800, just to refinance out of it my payments gonna be this much, if I sold this to someone on terms, what would their monthly payment be if they brought fifth 50 down a percent. So this one’s pretty easy. I don’t know if you guys have done this before. But you just go to a mortgage calculator online, you would say, so if I sold this house to someone first for 79 8% and 30 years, but remember, they’re going to bring some money down. So actually, it’s going to be for 29. Because I there give me 50k down, this should be with taxes and insurance according to this. So 3148 is what the monthly payment that they would be giving, they’d be paying me monthly payment on a seller finance offer, I would refinance out rate and term refinance, they pay the hard money lender off, and then now I’m paying what I owe, paid the hard money lender, I paid to them the bank 2800 Is my payment.

And then I can sell it to someone and hopefully get 50k down a percent interest to them charge about 479, then I’m making enough to cover the payment, I have to make the bank every month and I’ve gotten some money down. So number four is a lease option. Okay, so what is a lease option, you’re leasing someone you’re renting the house out and giving them the opportunity or the option to purchase it in a year or two, okay, they do not have ownership their tenants, okay, they do not own it until they exercise their option to purchase it in a couple of years. If I do a lease option, we already know that the rents are about 2500 a month on monthly rents. And right now my payment if I refinance out, and this is 2800 with taxes and insurance. Okay, so I’m, I’m at a loss of $300 a month. But again, I can last that 300 a month. If I do that for like 2025 months before I’ve lost money. Now, I was talking to Jared one of my mentors, and this is what he said to do on a lease option to get more money. This is Genius, by the way, he’s saying, Look rents gonna be 2500. But if you’re open to putting an extra 500 I’ll take 1000 of what you’re paying every month, and I’ll apply it to the purchase price of when you exercise your option to purchase the home. If you put the purchase price of the home, let’s say originally, you’re looking to get 450 for it for 459. That’s originally what you wanted. And you would say hey,

I’m gonna give you the option. I’m gonna give you two years. So all you would do, he said is inflate the price by how much money you’re giving them the discount of So $1,000.02 years that’s $24,000 that they’re technically you they feel like they’re, it’s applying towards the purchase price. So you would just add the 20 For that they’re saving, you would add it to the purchase price that you originally are wanting to get. So you can say, hey, look, you can just rent it. Or if you want the option to purchase it in two years after renting it $500 more. So your payments 3000 We’re gonna apply 1000 of that to the purchase price of the home over the next two years, until you exercise your option. And you’re just going to have to pay out 259 Because the purchase price that you’re buying it for is 283.

Okay, so that’s another option to do. So if you are in a bind, right now you have a house that’s not selling, you have four options, lower the price, take a loss now rent it out currently, and have it covered the hard money loan payment or close to it and take a loss slowly do a seller finance deal refinance out of it, sell it to someone for a higher interest rate, then you have higher payment and get some money down for lease option and tell them you know, they can pay a little bit more and you’ll apply some of the money that extra money that they’re they’re paying higher on the rent towards the purchase price and just inflate the purchase price. Okay. Oh, wow. Hey, guys, I feel good too. Because this is something I’ve been thinking about. I don’t want to be in a position like this. I’m not prideful or too prideful to say like, Hey, this will happen. This happens sometimes. I mean, you win big you lose sometimes, okay. It’s not a perfect science and then if the market just kept going up and up and up, never to change never go down then everybody in their in their mom and everybody else would be in investing but that’s what makes doing this so awesome. Is because there’s wins or losses, but what do you do? You got to pivot?


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