{"id":85032,"date":"2017-01-09T05:00:54","date_gmt":"2017-01-09T12:00:54","guid":{"rendered":"https:\/\/www.biggerpockets.com\/renewsblog\/?p=85032"},"modified":"2021-03-16T12:17:56","modified_gmt":"2021-03-16T18:17:56","slug":"alternative-exit-strategies","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/alternative-exit-strategies","title":{"rendered":"5 Alternative Exit Strategies to Liquidate Properties Fast"},"content":{"rendered":"

If you\u2019re anything like me, you say the words \u201cTime for Plan B!\u201d more than occasionally.<\/p>\n

That\u2019s how life is — sometimes it goes according to plan, but just as often it doesn\u2019t. A fly in the ointment. A wrinkle in your beautifully laid agenda.<\/p>\n

The only difference in real estate investing is that the plan involves assets worth hundreds of thousands (or millions!) of dollars. That means that Plan B needs to be acceptable — fast and loss-free.<\/p>\n

Here are five alternatives to selling the ol\u2019 fashioned way, five contingency plans, five alternate exit strategies so that you’ll never find yourself trapped owning properties beyond their expiration date.<\/p>\n

1. Bundle for Joy<\/h3>\n

Have more than one property to sell? Why not bundle them together and sell them as a package deal?<\/p>\n

Not all bundled properties are blue-light specials. Some are turnkey properties in good condition and may even be rented and cash flowing nicely.<\/p>\n

So who buys bundled property portfolios? It\u2019s a mixed bag of international investors, large funds, group buyers, and individuals with deep pockets. While there aren\u2019t nearly as many qualified buyers, there\u2019s a nice scale-ability to selling multiple properties in one package. Instead of scrambling to sell a dozen properties separately, you can focus all your marketing efforts on a single sale.<\/p>\n

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\nRelated:\u00a0<\/strong>How to Exit a Real Estate Deal Gone Bad<\/a> <\/em><\/p>\n

2. Auction it Off<\/h3>\n

If time is more important to you than money and you must<\/em> sell by a certain date, auctions can be an effective exit.<\/p>\n

Make no mistake — most auctioned properties don\u2019t sell for top dollar. Occasionally, buyers will bid the property up above market value, but it\u2019s the exception rather than the rule.<\/p>\n

Auctioneers have to build a solid reputation, just as they have to build reliable local marketing channels. That takes time, which is why there are so few auctioneers in any given market. Just look at Sotheby\u2019s, who\u2019s been around since before the United States was a country.<\/p>\n

You\u2019ll probably only have a few choices for auctioneers, but choose the most reputable one available.<\/p>\n

Talk to the auctioneer about their fees, about their marketing period and sale date, and about their estimated price range for your property. If you really have to settle quickly, auctioning your property may be the way to go.<\/p>\n

3. Investor Niche Real Estate Agents<\/h3>\n

The average real estate agent is pretty, um, average. Part-timers, mommies trying to squeeze in showings in between picking kids up from kindergarten, or fast-talking oil slicks who push-push-push to get your listing and then just\u2026 list it. These are the folks we talked about last week, the ones who are ripe for disruption as the real estate industry catches up with the 21st<\/sup> century<\/a>.<\/p>\n

But there are a few real estate agents\u00a0in each local market who have a special niche; they just work with investors. They know all the most active real estate investors in the area, and have a Rolodex overflowing with their contact information. They\u2019ve even built extensive email lists of all the best local investors.<\/p>\n

These real estate agents don\u2019t mess around. When you give them a listing, they start making phone calls and send an email blast, putting your property in front of every investor in a 30-mile radius. If your price is fair, you\u2019ll have a contract on the same day.<\/p>\n

That point about pricing bears elaborating. The price has to be attractive to other investors, if that\u2019s who you\u2019re targeting. If you go this route, you\u2019re effectively selling wholesale, not retail — as with auctions, don\u2019t expect lofty prices. But you can expect a relatively quick settlement.<\/p>\n

4. Guerilla FSBO<\/h3>\n

Can\u2019t afford to give up those hefty agent commissions? Why not try listing your property for sale on the MLS using a flat-fee listing service? But don\u2019t stop there.<\/p>\n

Get on Facebook and start posting details about your property on local real estate investing and buyer groups. For that matter, get on BiggerPockets and offer it for sale right here<\/a>!<\/p>\n

Put up flyers wherever the target buyer clientele frequent — local grocery stores, local gyms, local coffee shops. Get old school.<\/p>\n

Related:<\/strong> 5 Smart Exit Strategies for Buy & Hold Investors Looking to Get Out of the Game<\/a><\/em><\/p>\n

This may take longer than auctioning or hiring an investor-specialist real estate agent, but it sure costs less. Consider this strategy if you\u2019re tight on cash (or equity) but have plenty of time.<\/p>\n

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5. The Great Lease Option Agreement<\/h3>\n

If time is definitely not<\/em> of the essence, lease-option agreements are another way to sell without paying real estate agent\u00a0commissions.<\/p>\n

You probably know the term, but it\u2019s worth a one-sentence summary: You sign a lease agreement with renters, who have the option to buy the property for a certain price within a certain period of time.<\/p>\n

A relatively short period of time, mind you — otherwise, they lose all sense of urgency, and the property may appreciate well above the originally quoted price.<\/p>\n

\u201cLease options and owner finance strategies provide cash flow and well as eventual large profits,\u201d explains Matt Andrews, of REFreedom.com<\/a>. \u00a0\u201cCreating passive income on the way to sizable gains is a beautiful thing!\u201d<\/p>\n

And sometimes, for whatever reason, the market just isn\u2019t ripe for selling at this exact moment. Or maybe you\u2019re not ready to sell — maybe you want to wait a year before selling to secure capital gains tax rates over regular income tax rates.<\/p>\n

Movin’ on Up<\/h2>\n

Scaling your real estate investing business means taking on larger portfolios and more expensive properties. Read: bigger assets and higher risk.<\/p>\n

The more exit strategies you have at hand, the better you can contain that risk. If you know beyond a shadow of a doubt that you can always liquidate your properties with no losses, then you\u2019re operating in a world of all upside and no risk. Talk to other investors who have used these alternative exit strategies, get comfortable with them. Maybe even try one out on a low-risk property.<\/p>\n

You\u2019ll find yourself becoming the MacGyver of real estate — an escape artist, able to exit any property without taking a hit.<\/p>\n

What alternative exit strategies have you used successfully? What have you struggled with in the past? <\/em><\/p>\n

One investor’s story is another investor’s saving lesson…<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Being stuck with a property you need to unload is a real estate investor’s nightmare. Here are 5 alternative exit strategies to unload properties now.<\/p>\n","protected":false},"author":158586,"featured_media":82271,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5529],"tags":[],"class_list":["post-85032","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-marketing"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/85032","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/158586"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=85032"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/85032\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/82271"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=85032"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=85032"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=85032"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}