Fix and Flip Exit Strategies: Sell, Rent, or Refinance?

Markets change. Deals take longer than expected. Smart investors always have multiple exit strategies before they buy.

Exit Strategy #1: Retail Sale (The Goal)

What It Is: Sell the renovated home to an owner-occupant buyer at full retail value.

When It Works:

• Strong buyer demand
• Property shows well
• Priced correctly
• Market conditions are favorable

Pros:

• Maximum profit potential
• Clean exit
• Capital freed for next deal

Cons:

• Dependent on market conditions
• Requires time for buyer financing
• Staging and showing costs

Exit Strategy #2: Rent It Out

What It Is: Convert your flip to a rental if it won't sell.

When It Works:

• Monthly rent covers your costs
• You can refinance into a long-term loan
• You're comfortable being a landlord

Pros:

• Generates cash flow
• Property can appreciate while you wait
• Tax benefits of rental ownership

Cons:

• Capital stays tied up
• Landlord responsibilities
• May need to refinance out of hard money

The Math: Make sure rent covers PITI (Principal, Interest, Taxes, Insurance) plus reserves. If not, you're bleeding money monthly.

Exit Strategy #3: Refinance (BRRRR)

What It Is: Refinance into a conventional loan and pull out your capital.

When It Works:

• Property qualifies for conventional financing
• You have rental income to debt-qualify
• You want to keep the property long-term

Pros:

• Recycle your capital
• Keep the asset
• Build long-term wealth

Cons:

• Requires 6+ months seasoning
• Need to qualify for the loan
• Ties up the property

Exit Strategy #4: Seller Financing

What It Is: You become the bank. Buyer makes payments to you over time.

When It Works:

• Buyers can't qualify for traditional financing
• You want passive income
• Property is hard to sell traditionally

Pros:

• Higher sale price often possible
• Ongoing income stream
• Property secures the note

Cons:

• Capital tied up long-term
• Risk of buyer default
• Legal complexity

Exit Strategy #5: Sell to an Investor

What It Is: Sell at a discount to another investor or wholesaler.

When It Works:

• You need out fast
• Market is slow
• Property has issues

Pros:

• Fast exit
• Cash transaction
• No retail buyer contingencies

Cons:

• Lower price than retail
• Admits the deal isn't working

The Golden Rule

Never buy a property with only one exit strategy.

Before you close, know:

• What's your retail sale price?
• What could it rent for?
• Could you refinance and keep it?
• What's your floor price to break even?

If multiple exits work, you have a solid deal. If only one exit works (and barely), walk away.

Sell Your Property to Community Renaissance

If your flip isn't going as planned, we can help. Get a fast cash offer and move on to your next deal.