Nathan Street (D. Graziosi Success Academy) explains how real-estate investors should determine an exit strategy before acquiring property. He outlines common exits: finding a buyer (retail buyers who live in the house vs. wholesale/investor buyers who buy cash quickly), renting (emphasis on screening tenants via credit/background checks and even drive-by/home visits to assess quality), and creative financing options (seller-financing/promissory notes and using private/hard-money loans followed by a "no season" refinance). The talk stresses choosing an exit early to avoid defaulting to an undesirable "comfort" or "old crap" path and to create clearer decisions and better outcomes.
Chapters
Hello, my name is Nathan street with the D. Graziosi Success Academy. I want to talk to you now at this time a little bit about determining your exit strategy. As you're in the business of real estate investing, you may have heard some of the other material that I've done. But if you do not determine your exit strategy, you will choose a path, what I like to call the path of old crap path or the other situation known as the comfort path. If you have the exit strategy as a comfort path, you know exactly what you're getting into. Now let's talk a little about some of the exit strategies that you might choose so you have some options that you can take a look at. One of the most common that you will look at is to find a buyer. Because a very common situation that we look at in teaching people such as yourself is if you're into the property and you're looking to flip it, well, we want to have someone to flip it to. That's the buyer having a buyer. There are two types of buyers. There's a, there are retail buyers and then there are wholesale buyers. Retail buyers are people that want to live in the house. Wholesale buyers are people that are investors generally can purchase cash and quickly. So it creates more of an opportunity for you. Definitely something to look at on either side. Retail buyers are a little bit more fickle, so they are harder to work with. Wholesale buyers, cash, quick, easy. They just look at the number many of the times. Other ones would be renters. What type of renters do you want? You want good quality renters, so you want to pull some information on them, get to know them a little better because if they come into the property, you want to make sure that they can A pay and B keep the property clean. A couple things you can do then is pull their credit background and history. But you can also check on your renters that you'd be working with by driving to where they currently live. So when you get a renter's application, you wouldn't necessarily want to do it, but you want to have, say a family or friend drive by, knock on the door, maybe ask for a random address, but that will allow the door to be open so that they can take a peek into the property. So whoever it is that went out there for you can check to see the quality of the renter they are. That's going to be the same on a lease option or any others you might work with that are going to be more of a tenant situation for you. Other exits you might look at would be to do seller financing where you would actually hold the mortgage for the person purchasing the property from you. That may be a creative way to get rid of the property quickly. That alone creates a whole other business that you might take a look at as well. Selling and working with seller financing or promissory notes. So as I give you that, think about some of those things as you get into this business. Think about what is it that I'm going to exit on. There may be other financing techniques that you can use. I mentioned before on some of the others that you could do things like a no season refinance that's very popular. A lot of people are doing that now where you can purchase a property using something like a private or hard money loan. Kind of expensive, a little scary if you don't know what you're going to do afterwards. But then you pick it up and you quickly refinance into a no season refinance. You may find some great opportunity for doing something like that. So I've given you a few options you can take a look at. What are you going to do with it? You want to think of those things as your exit strategies. Think about some of the positives that will come with it and that will open up exactly the strategy you're looking for and exactly the path that will open up for you so that you have more of an ah, moment versus oh no, I don't know what I'm going to do. Creating a better circumstance overall.
