The sales strategy of your real estate investment business plan is another great section. You really need to focus on that. Ultimately, you must be able to sell your properties at a profit. This is your business. You’re going to be buying, maybe waiting for a while, but eventually you’re going to have to be able to sell or provide some sort of exit strategy that makes sense.

buy against flipping

Now if you’re going to buy a property and hold it, for the most part that’s a strategy that I think makes the most sense. Certainly in this economic environment, I think it makes a lot more sense. Then your private lenders can stay with you for a couple of years for the most part, and it would allow them to get paid over time.

Then sometime 3, 4, 5, even 10 years down the road, you would sell the property and pay off your private investor. So part of the sales strategy is how are you going to execute that? Are you going to buy and hold or are you going to buy and flip? You have to be able to lay that out for the investor.

What is your sales strategy?

Are you going to be making the sale? I’m guessing most of the people on this call aren’t real estate agents, so the question will be, will you sell it yourself? Are you going to hire professionals to sell it on your behalf, including real estate agents, and go through that process?

You have to make those decisions. You have to think carefully if you want to sell it through that mechanism or are you going to try to sell it yourself.

Decide on a sale price

You need to understand how you are going to price the property. Are you going to price it really aggressively to sell it quickly, thus giving up some potential profit but trying to sell the property relatively quickly? In this environment, that may be your only option, but hopefully as the real estate market calms down and returns to normal, you’ll have a few options and could sometimes price it a little more aggressively. You have to think these things through.

So you need to think about, again, I think we’ve talked about this once, which is the lease option. Are you going to sell it through a lease option, meaning you would offer tenants or prospective buyers the option to rent the property for a year or two or three, but ultimately give them the right to purchase the property at some point? time later? road?