What's Your Exit Strategy?

Before you start to look for deals, ask yourself these questions:

What is your exit strategy?

There are several basic exit strategies and there are many many more out there. Your exit strategy will depend on what you are trying to achieve. For example, passive income or quick cash.

1. Cash Flow - buy and hold for passive income
2. Retail Flip - buy, fix and flip to end use (homeowners)
3. Investor Flip - buy, fix and flip to other investors who do not have the time to fix up the property.
4. Wholesale - buy and wholesale to other investor at discounted price without fix for quick cash
5. Rent to own - aka. lease option. The tenant pays rent and has option to buy the property few years down the road.
   

And what area fits that strategy?
Eg. Wholesale, investor flip, cashflow rentals in Kansas City vs. Retail flip in Houston
Lease option has the potential to turn negative cash flow property into positive cash flow.

Make sure the property value matches your exit strategy

Which area within a city are you going to invest?
Look for neighborhood with lots amenities such as school, church, shopping, transit, etc. The government has put in effort to develop/re-develop the area. The best way is to check out the city planning and development website. Most cities have comprehensive long term and short term plans for areas within the city on their website. Or talk to the city planners and pick their brains.

I find that I have more success focusing on one or two strategies at a time and really learn the ins and outs of the strategies. Too much going on at once is too mind boggling and confusing.