Ahh, exit strategies... The lingua franca of real estate investing programs.... Retail, wholesale, rentals, hmmm, are these DVDs or properties? Seems nowadays the only thing being taught is wholesaling, more accurately, (contract) assignments. No wonder since many people trying to make their first million in two weeks have little or no money and poor credit. Never fear, that's the formula to success in real estate, right? No? That's what I keep hearing on the radio!
Well, in the good old days, you know, like 2006, buying to hold was considered a mainstay strategy for investing with positive cashflows promising eternal bliss as properties are paid off by friendly tenants as they appreciate and you retire to your ranch in Arizona fat and happy after selling your profitable portfolio to some johnny-come-lately in fifteen years. But something happened on the road to 2008. Properties, particularly in the inner cities (where most rentals are), stopped appreciating, and well, we all know that the refi well has gone virtually dry (more on that stupidity in a near future post). But I'm not convinced that those two things are what has conspired to cool the quest for a portfolio of passive-income producing rental properties. No, I think the quest for the gold rush, just like with everything else that comes down the pike, has derailed the real estate investing crowd to go for the gusto, the immediate gratification, not of flips even, but of wholesaling. Hmm, you mean all I have to do is find a property, borrow (inside joke) someone's proof of funds, find some other schmuck, er, investor, to dump, I mean, sell the contract to and I collect a fee? Wow, what could be easier?
More Tuesday....
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