… victorious army wins its victories before seeking battle; an army destined to defeat fights in hope of winning.
- Sun Tsu, ‘The Art of War’
EXITS
Know your exits first. No investor should ever enter into a real estate transaction without have a clear exit strategy first. If you are doing your deals “…in a hope of winning” you are destined to become an X-Real Estate investor.
If you want to avoid this glooming destiny, there are a few questions you should truthfully ask yourself before your pen hits the closing docs:
Are you planning to flip a property to another investor or are you thinking of fixing it up and selling it retail?
How long is your holding time?
What’s your daily holding cost?
How long do you think it will take you to sell? Did you compare this projection with an average ‘Days On Market’ number in local MLS?
Are you budgeted for extra hold time?
What’s your rehab and marketing cost?
What’s your contingency plan if your contractor doesn’t show up for a few days? (and do you know where he lives? J)
Do you have prospective buyers lined up? How will they finance the purchase?
It’s true that you MAKE your profit when you buy, but you BANK your profit only when you sell.
