Posted by Keff on June 12, 2009 at 14:54:00:
Will do Maggie Thanks
Exit Strategies for Mutifamily Units - Posted by Keff Johnson
Posted by Keff Johnson on June 09, 2009 at 14:37:47:
Hey could anyone pose a couple of good exit Strategies for Apartment Complexes. I have a deal I am currently working and need at least 3 good exit strategies for a lender thats asking?
Re: Exit Strategies for Mutifamily Units - Posted by ray@lcorn
Posted by ray@lcorn on June 13, 2009 at 12:02:16:
Keff,
Usually when a lender asks about an exit strategy, what he means is how are you going to take him out of the deal at the end of the loan term. My guess is this is a bank deal and he’s offering a 3 to 5 year deal with perhaps 20-year amortization.
What he’s looking for is your investment plan to increase value and performance so that at the end of his deal you have a good asset to sell or refinance. A good investment plan considers best-case, most-likely case, and worst-case. The exits available in each scenario are different, and you especially need to think the worst-case scenario through, as in what will you do if everything goes wrong? How will you know? When will you know?
A few tips: have a plan to improve performance, i.e. raise revenue & reduce expenses; know your break-even ratio (see my article at http://www.creonline.com/articles/art-203.html); and identify who (contractor, employee, professional, etc.) is responsible for the various functions needed to accomplish the plan.
ray
Re: Exit Strategies for Mutifamily Units - Posted by Jim
Posted by Jim on June 09, 2009 at 15:10:13:
a few ideas: sell, refinance, 1031 exchange into a triple net lease (or Tenancy in Common or any other piece of real estate–especially if it’s bigger) donate the property to a Charitable Remainder Trust and receive income for life, or give it to me (just kidding).
Hope this is a good start.
Re: Exit Strategies for Mutifamily Units - Posted by Keff
Posted by Keff on June 12, 2009 at 14:13:44:
Thanks Jim that is a good start. I will let you know how it goes.
Re: Exit Strategies for Mutifamily Units - Posted by MLayne
Posted by MLayne on June 09, 2009 at 21:10:38:
If you trying to get a short term bridge, and it does not work out, let me know.