The Avid Rehabber Exit Strategies
June 5, 2017
Let’s talk about exit strategies on your potential rehab purchase. Why is this important? Without a road map of what you plan to accomplish with the house you will be spinning your wheels. I will tell you what we do at J and C Homes with our road map of exit strategies and how they can open up multi streams of income. This is our philosophy of buying and selling properties, and to stress the beginning point of the process is ARV (remember from the last blog After Repair Value). We started in our business with a three exit strategy program but have since added a forth:
- Exit Strategy one, purchase for wholesale: if the house is in an unstable area you can still purchase the property and do a prehab (we call this the lipstick, rouge and perfume program). Paint, low end carpet and linoleum with minimum value appliances. Sale to a first time buyer or investor who will rent the property.
- Exit Strategy two, purchase for full retail flip: the house is in a great area of town with very stable comps to verify ARV. We will now have our favorite time in the J and C Homes business updating to today’s standard. Wood floors hard surface counters in kitchen and bath open floor plan in living and kitchen areas and top of the line appliances including washer and dryer. Bam full offer within a week of listing.
- Exit Strategy three, purchase to hold, the house is in a good area of town with rentals in the area. We will generally rehab to today’s standards to receive optimum rents. We currently have 6 Condos between my Partner Cindy (the C of J and C Homes) and myself.
- Exit Strategy four, the newest in our Business, the house is in an area close to popular attractions in your town. Purchase to list on Airbnb https://www.airbnb.com/rooms/new. What an amazing concept a company that owns no real estate but rents out more rooms than any hotel chain in the world. We bring the property up to today’s standards and then list it on the Airbnb site. I will discuss this in more detail in the next blog. We are using one of our properties for this purpose.
Before and After ($1,300 already booked on Airbnb in June).
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