Exits Impact Offers

How Your Exit Plan Impacts Potential Offers

As we have covered in another post, there are multiple ways to profit from or "exit" a property. Your exit options can impact your offer. This can be helpful in overcoming rejected offers from sellers.

The two components from your deal analysis to keep in mind are the profit (or net cash flows) and the return on investment (or return on cash). A wise investor will begin with profit and ROI targets in mind and back into offer prices that will hit those targets.

In short, the more money you can make, or the higher ROI you achieve, the more you can offer. For example, co-rooming or short-term rentals will typically be more profitable than long-term rentals. With higher profit and returns, you can offer more for the property, which might make the difference between rejection and acceptance.

Various combination of funding can impact the amount of personal cash in the project, changing your return on cash metric. This can be a factor in your offer as well. Know your options for funding and exit, and make better offers.