Cutting Your Losses In Real Estate

Working in real estate or any other business can be really challenging especially if you do not have enough deals over a long period of time. It happens to most of us at some point. Part of the problem is that we can’t individually control the real estate market and other factors, even locally. Do not be discouraged by it because in this article I will provide you some tips you can use if the deal is going in the wrong direction.


  1. Find a Partner

I would recommend you to consider a partner because not all the deals are profitable right on the spot. Sometimes you’ll encounter some minor loss in a relatively short period of time before it bears fruit in the long run. So it makes sense to possibly bringing in a money or credit partner to help you decrease the loss. It is your duty to make sure that once the deal is done, there’s enough profit to go around so that you both don’t end up losing money.


  1. Speak to someone with experience

It is always good to run the numbers or deal by someone you know and trust and who has the proper knowledge and experience to render a valid opinion. This could be your mentor, lender, or other investors. What I would do it I was you is to find a hard money lender because from there you’ll know that if your deal is attractive or not. If it’s not they probably won’t bother to lend you any because with their experience they know which is a good and bad deal.


  1. Determine Your Walk-Away Point

Whether its business or real estate it always involves a lot of moving parts, but in conclusion, it’s all about the numbers. To be successful, you have to spend less than what you sell a property for and thus make a profit. That is basic knowledge and anyone should know that. If you’re offering too much or spending too much to rehab a deal it doesn’t make sense financially. Determining your walk-away point is invaluable, but you have to stick to it. Because it’s better to learn from your mistakes and spend time on another deal that makes sense.


  1. Multiple Exit Strategies

Yes, I know the majority of us would have Plan A and Plan B on our mind and that’s common. According to my experience, there have been a couple of times we refurbished property and then the market decides to take an unexpected fall. So we’ve got two choices, one we could sell and the deal the loss or we could use another strategy such as renting the property out, selling it on a lease option, or selling on a land contract. See, the benefits of having multiple exit strategies is crucial because we can’t predict the future but it is our responsibility to prepare for any unexpected events.





  1. Keep Educated of the Current Market

Making sure you’re constantly aware of the current real estate market is crucial because it helps you to make the right decision on what is a good deal or not. Because what may seem to work the year before may not be as effective today so I would get myself up to date in order to be ahead of others. A Great way to keep current is attending Real Estate Investor Associations, Title Company and Realtor Courses that are available to investors.


If you’re in the real estate game long enough, you may run into a deal that started out great but for some reason became slim and that’s life. There is no one perfect way to guarantee a hundred percent success.. I hope one or more of these strategies help you muddle through a deal that has gone or is heading south.

Be sure to look at the big picture and consider your options and here is to your success!

Leave a Reply

Your email address will not be published. Required fields are marked *