All Topics / Help Needed! / Exit strategy

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  • Profile photo of GilesGiles
    Participant
    @giles1
    Join Date: 2014
    Post Count: 3

    Hi Guys,

    Is someone able to elaborate on exit strategies that some use with there IP’s..?

    Thanks

    Profile photo of Tom@SadhanaConstructions[email protected]
    Participant
    @spartantom
    Join Date: 2015
    Post Count: 18

    Can you elaborate on the particular situation?

    There’s lots of options but at the same time if you’re “exiting” you will no doubt be selling the place…

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    Profile photo of CatalystCatalyst
    Participant
    @catalyst
    Join Date: 2008
    Post Count: 1,404

    Can you elaborate on the particular situation?

    There’s lots of options but at the same time if you’re “exiting” you will no doubt be selling the place…

    Why do you say that? I assume the OP means exit strategy by exiting the workforce (the end goal), not exiting property.

    There are quite a few different exit strategies. Everyone is different. It depends on your timeframe, structure etc.

    One strategy is buy heap of properties, wait for CG then sell half and live off the rent.

    Some Live off Equity (or a mix of rent and equity)

    Others sell everything and invest in shares.

    If time permits (or if you manufacture CG) you can just live off the rent without selling. That’s what I’m doing, mixed with some income from shares.

    You need to figure that out yourself because that will in turn define your start strategy and your goals along the way. But keep in mind things change along the way so your goals change as you learn and grow.

    • This reply was modified 5 years, 2 months ago by Profile photo of Catalyst Catalyst.
    Profile photo of BuyersAgentBuyersAgent
    Participant
    @knightm
    Join Date: 2005
    Post Count: 338

    Agreed this can be interpreted several ways.
    1 – exit deposit capital, this can be done via refinance after equity game.
    2 – exit profit – via cashflow to live on (rent) or LOE
    3 – exit profit final – ie selling
    4 – exit the game – retirement if you really plan on doing nothing.

    Personally I don’t see the point of “retirement” when it comes to investing, I think the reality for most people is far more fluid, and they remain engaged in the investing side of things (sometimes moreso than when working ft) after finishing working ft

    If you are talking about selling, my experience has been fun 4 from 4 times, all very profitable exits. My advice is to give the market what it wants, ie finished cosmetically beautiful properties ready for families, couples etc. In smaller markets (like mining towns) you want to sell into the rise, because the risk after a downturn is that you won’t be able to sell out at all.

    In larger markets, you can probably hold on a little longer as the market may be a bit more forgiving for selling out just after a peak (depends on other economic shocks etc though)

    If you meant number 1 refinancing, then I call this “deposit recycling” and it works well when your serviceability is strong, so as soon as you have growth in a property you should access it, refinance, store the extra funds in an offset somewhere for a rainy day then when you have enough, go shopping for more property. This is a good way to expand a portfolio, but not technically exit, just exit of your input cash for that particular investment

    • This reply was modified 5 years, 2 months ago by Profile photo of BuyersAgent BuyersAgent.

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