An exit strategy is a means of escaping one's current unfavourable situation, or the company would be in a serious condition, leading to collapse of real estate market. A good and a practical exit strategy would automatically lead high success for the real estate investor. There are basically 4 types of exit strategies, namely,
Refinancing
Staging
Real Estate Appraisal/Getting Above the Market Price
Refinancing - It is the smart strategy to get rid of your existing mortgage through the proceeds of a new mortgage. In this manner you can very easily manage mortgage payments plus helps you in fetching the equity build up on the property that you have purchased until recently. Refinancing works really well if the interest rates have gone down, and you would therefore have greater debt ensuring high mortgage and eventually low interest rate per month. Moreover, Refinancing is used in most cases to improve overall cash flow.
Two Types of Refinancing:
No-Closing Cost
Borrowers with this type of refinancing typically pay few upfront fees to get the new mortgage loan. In fact, as long as the prevailing market rate is lower than your existing rate by 1.5-percentage point or more, it is financially beneficial to refinance because there is little or no cost in doing so.
Cash-Out
This type of refinance may not help lower the monthly payment or shorter mortgage periods. It can be used for home improvement, credit card and other debt consolidation if the borrower qualifies with their current home equity; they can refinance with a loan amount larger than their current mortgage and keep the cash difference.
Home Staging
Home staging is decorating your home with all the necessary things so that it looks look bigger, brighter, cleaner, warmer, more loving and, and above all it attracts the buyer's attention who can purchase it for good price. You can employ skilled craftsmen for home staging. These are called as Home Stagers. They can simply change the complete room interiors of your house to give a splendid feeling altogether.
Real Estate Appraisal/Getting Above the Market Price
Through this process, you develop a positive opinion of the value of your real estate property. It is based on the facts that all properties are heterogeneous in nature, as, no two properties are identical, and all properties differ from each other in their location, amongst other things. The positive opinion developed as the result will fetch you above the market price on your property, when you go for selling the property.