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Figure out how you are going to get OUT of a real estate investment before you get IN.

Posted by John Reed on

A memorable line I once read about real estate investment was that could tell the pros by the fact that they were figuring out how they were going to get OUT of a property before they got IN. I would add that the pros also should not agree to balloon payments although many who ought to know better do.
My most recent book about principal residences is very much about this although I may not have mentioned it per se in the book..
To get out of a home, you just sell it. The buyer can easily get financing if qualified. But if you are buying land or non-home real estate you probably have to get no financing or balloon-payment financing. And the LENDER will likely be the SELLER. That means when YOU sell, you probably have be the lender, too. Do not buy such properties.
I DID buy four apartment buildings. I managed to get rid of all four without taking back a mortgage, but it was difficult. I never bought another apartment building.

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