Real estate exit strategy. How to exit from active real estate investing to passive.

Explore exit strategies in real estate investing. From basic to advanced, these strategies offer unique opportunities to maximize your investments. Whether you're a beginner or an experienced investor, you'll gain a clear understanding of real estate exit strategies.

last updated Thursday, November 30, 2023
#real estate exit strategy #Real estate exit strategy example

John Burson     Subscribe
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This article is all about exit strategies in hard asset real estate investing. We will discuss some exit strategies real estate investors can use to get the most out of their investments.

These strategies have different levels, from basic to advanced, and some offer unique opportunities that can be overlooked. Whether you're a beginner or an experienced investor, this article will give you a clear understanding of exit strategies in real estate investing.

Selling the Real Estate.

The most common exit strategy in real estate is to sell the property for a profit, which can be done after making improvements or generating ongoing rental income.

Real Estate Refinancing.

If you intend to retain property ownership over an extended period, refinancing a short-term loan to a longer-term loan with more favorable rates represents a viable option. This approach lets you withdraw your capital from the property while retaining ownership. Doing so lets you take advantage of more attractive loan terms and reduce your overall borrowing costs.

Leveraging a 1031 Exchange Program

A 1031 Exchange allows the deferment of taxes on property sale proceeds by reinvesting in similar assets. This strategy can help grow your portfolio and defer taxes on property sales.

Creating a Trust.

Placing real estate in a trust can protect assets from creditors and allow for controlled distribution to beneficiaries. Offshore trusts can provide additional creditor protection.

Transferring Real Estate into Self-Directed Brokerage Account Fund.

Real estate assets can be owned in a Self-Directed IRA, providing tax-deferred growth and an exit strategy..

Exiting to REIT Investment.

If a property fits the acquisition parameters of a specific REIT, selling owned real estate to REIT can be a solid exit strategy for investors looking for passive investment and flexibility.
Publicly traded REITs can be easily sold, providing a flexible exit strategy. Note: Non-traded REITs have different rules and should be used by experienced investors.

Exiting a Real Estate Investment Fund.

Like selling or transferring investment property to a public REIT, a Private Real Estate Investment  Fund can be an alternative exit strategy.

Open - Real Estate Investment Funds hub

Exiting a Real Estate Syndication Deal.

In a real estate syndication, the sponsor handles all investment details while investors stay passive. 
Exiting or selling real estate investment property to a syndication deal will depend on the operating or partnership agreement. 

These exit strategies allow investors to allocate their capital from more active real estate investments to more passive ones.


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