As a real estate investor, there are many different exit strategies to consider when it comes time to sell one of your properties. You can choose from a variety of options depending on your goals and the current state of the market. Here are some common ways that investors exit commercial properties:
Lease-Option to Tenant Buyer or Owner Financing
If you are not ready to buy but want to take advantage of the benefits of owning a property, consider entering into a lease option. This is a contract between the landlord and tenant that allows the tenant to purchase the property at a later date.
The tenant pays rent and deposits as well as additional fees for exercising their option. The landlord still owns and controls the home until it is sold or otherwise transferred to another party for ownership. If this option works for you, find out more about various types of commercial mortgage best rates terms on online websites! Commercial Trust advisors say, “Commercial mortgages can also be secured on land, with or without planning permission.”
Cashing out
This is the simplest option if you’re looking to cash out and get your money back. You can sell the property and take the profit. This strategy works best if you have another property in mind that you want to purchase or if you just want to take a chunk of money off the table and move on.
Suppose you still need to line up another investment. In that case, it can make sense to use some of your proceeds from the sale to invest in other real estate assets like stocks or bonds—but this isn’t always advisable since these investments aren’t as stable as real estate investing, generally speaking.
Sell to Another Investor
- Sell to Another Investor. If you’re dealing with more than one investor, selling your commercial real estate investment straight to another investor is the best option. This can be done either through a broker or directly between parties. A broker will handle all of the details and paperwork for you, but if you choose not to use a broker, there are still several steps that need to be taken care of before closing on such a deal:
- Summarize your business plan for the past year and future plans (long-term).
- Discuss how much money you want out of this sale and how long it will take until a buyer can repurchase it from them.
- Sign all documents necessary.
Refinance & Keep the Property
Refinance options are available if you’re purchasing a commercial property and want to keep the property. There are a few options on how to refinance your commercial property:
- Refinance It Yourself.
- Refinance With A Different Lender.
- Refinance With The Same Lender (This is typically done if you don’t have enough equity in the property).
If you choose to refinance yourself, you must know what kind of rate/terms you can get from a lender before approaching them about refinancing.
This post must have helped you understand how to exit your commercial real estate investment. Also, many more strategies are not listed here, so please feel free to reach experts if you have any questions or would like assistance finding an exit strategy for your own property. Good luck!