Acquisition Strategies and Exit Strategies: Why Both Are Important
May 27, 2014
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I met a new Rich Dad Education student at a recent Symposium. He was from California and had enrolled in our Elite Training Program a few weeks earlier. He was excited to take his first training, the Foreclosure class; but he was even more excited to begin investing in real estate.
He told me that he wanted to “do a foreclosure deal.” I informed him that in the Foreclosure class, he would learn some great acquisition strategies. I then asked him what exit strategy he wanted to use on his first deal. He was puzzled by my question. He is not the first student I have met over the years who failed to initially think about both sides of the formula. You need both “acquisition strategies” and “exit strategies.” The more of both you have, the better equipped you will be to handle (and profit from) future transformations in your local real estate market.
There are a lot of great acquisition strategies. One way many newbies start is with simple marketing that declares, “I Buy Homes, Ca$h or Terms.” When we buy with cash, whether it is our cash or OPM (other people’s money), we need a significant discount. The Wholesale Elite Training covers cash strategies in great detail. Terms purchases can involve a multitude of contract engineering techniques. These strategies are covered in two different Elite Trainings: Lease Options and Creative Real Estate Financing. What is neat about these three “cash and terms” trainings is they also teach valuable exit strategies.
With exit strategies, you convert your acquisition into cash, cash flow or a combination of cash and cash flow. Investors who want the benefit of passive income from holding rental property will find great value by taking the Property Management & Cash Flow Elite Trainings. Investors who want to convert their acquisition into immediate cash have two popular exit strategies: sell it wholesale or sell it retail. Creating a combination of cash and cash flow can be a bit more complicated, but all the details are covered in the Lease Options and Creative Financing trainings mentioned above. If you took one of these classes before this year, it may behoove you to retake it soon, since there have been some recent changes in federal law that affect seller financing transactions.
By Eric Buchanan
Rich Dad® Education Elite Training Mentor