Commercial Real Estate Exit Strategies for Investors in Lake Havasu City

Lake Havasu City is becoming a popular market for commercial real estate investments. It is a growing city with so much to offer. However, individuals new to CRE investing often overlook the importance of having an exit strategy. Commercial real estate exit strategies are the investor’s plans for disposing of the property. Your exit strategy can affect return on investment, taxes, risk, and more.

Read on to learn about common exit strategies for commercial real estate investors in Lake Havasu City.

Commercial Real Estate Exit Strategies in Lake Havasu City

Hold and Sell

This is one of the most straightforward exit strategies. When you hold and sell, you buy property intending to maintain it long-term to benefit from appreciation. Many commercial properties also generate revenue for the owner. The idea is to hold the property for an extended period and then sell it at the most opportune time. Key factors in deciding when to sell include market conditions, property performance, and investment goals.

1031 Exchange

With a 1031 exchange, investors can defer capital gains taxes by reinvesting the proceeds into a similar property. This approach enhances portfolio growth and diversification while maximizing capital use. It suits those who build wealth and expand their real estate holdings over time. However, it is more complex than selling the property and buying a new one. The investor must follow strict guidelines for the transaction to be eligible.

Refinancing Investments

While refinancing isn’t a hard exit from a property, it can offer flexibility. With refinancing, you take out a new loan to pay off the existing loan against the property. One reason to do this is to get a new loan with better terms. It can also be a move to access equity and use the funds for other investments or property improvements. This strategy allows the investor to access funds or lower costs while retaining ownership.

Improve and Sell

Some investors may target properties that need improvements. The idea is to buy a property, enhance its value, and sell it for a profit. For most investors, that means performing renovations or making upgrades. However, some might also target operational improvements to increase profitability. Improving a property’s overall value or financial performance can make it a more attractive asset to other investors.

Seller Financing

With seller financing, you sell the commercial property by providing a loan to the buyer. This strategy can facilitate a quicker sale, attract more buyers, and potentially command a higher sale price. It could also offer additional income through interest payments on the loan. While it does carry some additional risk, seller financing can provide a significant upside.

Do you need commercial real estate services in Lake Havasu City? Click here to contact Randy Shuffler. He is a CCIM operating in the Lake Havasu City area. Whether you’re buying, selling, investing, or leasing, we can help. Reach out now to learn more.

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