Multiple Exit Strategies To Limit Risk

[Daniel Jackson]

To the Investor out there that is new to REI and might be nervous about investing because they know they are taking a risk, focus on limiting risk as much as possible. One way to do this when calculating the risk and profit margins on a deal, is to make sure it has more than one exit strategy. That way, at least if one exit strategy doesn't work, you have another route you can take.

So case in point, you are looking fix and flip a SFH. You love the house and the potential "after repair value it" has, but you are skeptical what the market will look like in a few months when it is time to sell the house. It would be of your best interest to calculate the average lease price in that area and affirm that the lease price can cover your holding cost, incase you have to rent out the house for the time being until the market is back on track and you are able to sell the house. To conclude, make sure your deal has more than one exit strategy to limit the risk of losing what you have invested into the deal. Thank you for reading.