Your exit strategy is the key to a successful real estate investment. But do you have an exit prepared for your next multi-family project? You might be wondering what some of the best exit strategies are for multi-family real estate. In this post, we go over some of the best strategies specifically for multi-family real estate investors.
Reposition Your Property
Repositioning your multi-family property is an exit strategy that allows you to add value to your property by converting it into an asset outside the multi-family real estate market. In areas that have high demand for other properties like office buildings, real estate investors will reposition their properties to better expose themselves to a more profitable, in-demand market. An investor can easily generate a higher return on investment when they reposition a property.
Flip or Wholesale
Similar to repositioning your property, house flipping is an exit strategy used by investors who wish to create new value in their properties through renovations. Make sure to include the rehab costs in your selling price but do not get too greedy when it comes to taking profits. Wholesaling can offer quick cash to those looking to sell their multi-family property. Real estate wholesaling is when a wholesaler sells a property for a profit on behalf of the property owner. Those looking for short term cash generating exit strategies for a multi-family property should consider wholesaling.
Turning your multi-family property into a rent-to-own property is a strategic way to offload your investment. Also known as a lease option, this exit strategy allows you to lease your property to a tenant for a certain period with the option to purchase the property. Investors can benefit from having a stable source of income from the property. If the tenant agrees to purchase it, investors will not have to spend time or money renovating the property since the tenant already lives in it. The rent-to-own option is one of the best exit strategies for multi-family real estate investors.
When you chose to exit your multi-family property with seller financing, you are essentially financing the property to the buyer. The buyer handles the mortgage process and serves as the mortgage lender. This strategy is often used when supply is higher than demand in the real estate market to entice buyers. Both parties benefit from saving money in closing costs and by negotiating better terms. Regulations can be flexible with seller financing. There are risks that come with this strategy, like the buyer not meeting the contract terms. In a market that has too much supply, this exit strategy will show its strength.
Bring in a New Partner
Bringing in a new partner means having more cash to enhance your property. Finding a new capital partner to provide funds will help add value to your property. With more cash on hand, you can turn your property into any asset you’d like. A partner also brings in networking that can be beneficial to your property’s reach. You’ll be able to accomplish more with your property when you have a business partner. If you find yourself with limited options, consider enlisting in the help of a partner. This can be one of the best exit strategies for multi-family real estate investors if they have limited options with their property.
RCN Capital offers short-term and long-term financing options for real estate investors. Whether you are looking to fix & flip properties or hold properties for rental income, RCN has flexible options that are suited to your needs. Connect with us today to discuss your next real estate investment.