Multifamily Exit Strategy

2 Replies

I hear so much about the importance of an exit strategy. However, is an exit strategy even necessary for buy and hold properties (multifamily deals) ?

The seller I've been talking with seems open to seller financing. I was hoping to just get cash flow and experience from this property (I'm very new to real estate investing. this would be my first property). The property is a duplex and one of the units is already occupied [tenant is on section8]. With both units rented, it cash flows really well. I'm always in the area, as I have family in this area, so I would definitely be able to keep my eyes on it at all times. I guess my main question is, is it a good idea to buy a property specifically for cash flow, knowing there's minimal equity ?

I'll take a shot at this. 

Of course.  Cash flow is king.  ROE, cash on cash etc rocks. You can sell the deal the same way you bough it after banking cash flow for a stretch if you want to. Do the numbers on what your return would be against the amount of money you have in the deal.  Don't kid yourself about expenses.  A duplex "should" be easy to determine.  Do it.  Have you read around this forum about how to calc expenses?

Originally posted by @Joshua White :

I hear so much about the importance of an exit strategy. However, is an exit strategy even necessary for buy and hold properties (multifamily deals) ?

The seller I've been talking with seems open to seller financing. I was hoping to just get cash flow and experience from this property (I'm very new to real estate investing. this would be my first property). The property is a duplex and one of the units is already occupied [tenant is on section8]. With both units rented, it cash flows really well. I'm always in the area, as I have family in this area, so I would definitely be able to keep my eyes on it at all times. I guess my main question is, is it a good idea to buy a property specifically for cash flow, knowing there's minimal equity ?

 You don't need a short term exit strategy but as a buy and hold investor you may need a long term exit strategy. Think 10+ years into the future. I personally want to invest in big multifamily, so having a bunch of smaller multifamily might not work well into that plan.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here