Good morning bigger pocket family ,
I’m interested in hearing some ideas on buy and hold exit plans if you have any or executed some with positively or negative results please share
Ideally you have thought of your exit strategies BEFORE you buy.
The beauty of buy & hold real estate is that it usually has multiple options, assuming you bought it right. Generally the options are as follows:
- Continue to hold and collect cash flow
- Sell it
- Cash-out refinance to get your equity out
Do you currently own any rentals?
What Greg said! ..."assuming you bought it right" (cannot be emphasized too much)!
Do I need to say that again?...
@Tanisha Baker Buy and hold exit plans are often governed by the market dynamics and an investor's financial situation. For instance, if your personal balance sheet is robust you can ride out a temporary dip in valuations (due to a market downturn/recession). Your exit strategy might have been to sell but your balance sheet can assist in timing.
Alternatively, if you are in a super hot market - San Francisco -, have been holding for a considerable period of time, you have sizable equity built up. You can choose to redeploy that capital into other market that might be a better fit for your needs. E.g. you're a long-term buy and hold investor nearing retirement. You will be relying on the income from your rentals. You will, in all likelihood, sell your properties in San Francisco to move into a more cash flow heavy market.
You can also choose to hold onto your existing properties and expand your portfolio buy doing a cash out re-fi (as mentioned by @Greg Scott ).
What path you take is dependent on a few factors but "failing to plan, is planning to fail."
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