Exit Strategies

May 24, 2025

We’ve all seen experts create volumes of content on how to invest in real estate. And lately the popular topic is how to buy a business. But we seldom hear those experts talk about selling those properties. It's just as important to know how to get out of a property as it is to know how to get into it. That is true, not just for real estate and businesses, but for any type of investment.

Your Job Exit

It’s even true for a job. How many times have you heard the story of someone who went to college and got a degree, got a job in their chosen career field, and then decided they really didn’t like what they were doing? Some continue on in the job, hating every minute of it but they stay with it because they don’t know what else to do. Have an exit strategy for your job. I can’t think of too many things that are more miserable than being stuck in a job you hate.

Real Estate

The exit strategy is a plan for the life cycle of your ownership of a property. You buy a property with the expectation of owning it for a specific amount of time. Some investors plan to keep their properties forever. They might possibly have a multi-generational wealth plan that includes that property. Some will sell early. If the value of the property has gone up substantially, you might be able to accelerate your cash flow, capturing ten or more years worth of cash flow at closing.

It's not always set in stone. It can change. But, you decide when, why, and how to dispose of it. And usually you do this in advance. You should plan an exit strategy when you buy the property. But, plan it knowing that by the time you decide to sell, your strategy might change. Exit strategies rarely stay exactly as you planned because life rarely goes exactly as planned. Your exit strategy needs to be somewhat flexible.

Businesses

Businesses are a great example of the need to be flexible. Your primary exit strategy might be to give your business to your children. But children having minds and ambitions all their own might not want your business. So be prepared to change that strategy.

This might all sound wishy washy but we are typically dealing in a strategy taking place over years, not weeks or months. A lot can change. Even so, whenever I have sold a property my profit was always considerably higher when I stayed close to my original exit strategy with only minor variances. The times that I sold without an exit strategy profit was minimal. It sounds so obvious but it is more often than not, a neglected part of the investing process.

Some Action Steps You Can Take

Next time you look at making an investment:

1. Look at all the exit options available to you before you invest.

2. Consider the ways your exit strategy might have to change during the life cycle of your investment.

3. This is a 3 day weekend. Go have some fun!

That's it for this time. See you next week!

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