can someone give me an example of an 'exit strategy letter'?

can someone give me an example of an 'exit strategy letter'?

Member since 2019 · 5 posts · 0 votes

Hi, this is my first post here. I'm in the middle of closing on my first investment property. it's an unusual one (my style...) and it's given me some hurdles but I'm excited about it! it's a very small (4 unit) mobile home park filled with 30-40 yr old park owned mobiles. the seller has not kept rent rolls and has very little to no documentation of rent history despite it being kept full (this area is very short on affordable housing). so, no proof of income and with the units being older it was tough to find a lender to work with me on it. I got lucky, found a private lender willing to fund it. one of the documents they are asking for is an 'exit strategy letter'. It's probably no big deal and I could give them whatever I write up, but my perfectionist tendencies are showing and I want to do it 'right'... but I can't find any examples to draw from. google searches for such a thing get filled with irrelevant results. 

my exit strategy is simple, after acquiring the property and keeping proper documentation (and making regular interest payments and growing my bank account) for the next year, I plan to refinance with a more traditional lender to get out of the high-interest, short-term private loan. 

can someone please help me with what to include and how it should look? even just an example of one would give me something to go on. thanks!

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  • Joshua DiazPro Member
    Rental Property Investor · Bronx, NY · Member since 2015 · 269 posts · 165 votes
    7y

    I don’t know if any templates but if I were you, I would type one up with your plan as you have stated.  But definitely include numbers in that letter.  What you can bring rents up to by including what market rents are,  what you can lower expenses to by including quotes or prices from service companies, the costs of management, etc.

    Not much to go on but I do hope it helps a little.

  • London · Member since 2019 · 722 posts · 386 votes
    7y

    When writing up the exit strategy, you are speculating about the future. Some things you can not know in advance. Other things are homework for you to verify.

    If you think you can find a lender for a 4 pad park with old MHs, state the name of the lender in the strategy. Better to have 3-4 lenders who are happy to lend once you have the history to back up the rent roll. If you are going to struggle to refinance, figure that out now and fix it before you accept the expensive short term loan.

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