The Flex Five: FLEXible exit strategies

One of the best things about flex is the amount of exit strategies you have, something that other real estate classes don’t offer. Exit strategies are critical to making smart decisions regarding the future of your investment. Let’s discuss the 5 exit strategies that I consider for all of my Flex developments.
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Planning Your Exit

Exit plans are a crucial point to consider before making any investment. They are a helpful tool you can use to decide the future of your project. Knowing your exit options from the very beginning allows you to develop attainable goals and make the decisions necessary to achieve them. By considering when you can exit and for how much, you can decide how to best proceed with your project. Here are the five exit plans you can use when developing your flex space:
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Land Exit

Land exit simply means putting your land up for sale after purchase before doing any sort of development. This allows you to see how much you can get for the land and increase its market value. I always list my land for sale before development and I have made over double my initial investment just by doing this step! If I receive an offer that will get me two times the return, then I will most likely sell and use that capital towards my next investment. By doing this step that most investors overlook, you can double your profit without doing any construction or development!
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Preliminary Exit

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The next strategy is listing your land for sale along with all of your preliminary drawings. This includes zoning, utilities, architectural, and engineering preliminary plans. These plans don’t have to be approved, they’re just conceptual drawings for a development on that land. Many investors are hesitant to buy land but become much more interested once you attach a tangible concept to it. Investors looking to save time when starting a project will also put up offers for these drawings.

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Shovel Ready Exit

This strategy takes the preliminary exit one step further by getting all of those conceptual plans approved. For a project to be shovel ready, you need to have fully approved architectural and engineering plans, utilities, permits, etc. This will allow the buyer to come in and take over the development at the construction phase, since all of the preliminary work has been done.

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Phase Out Exit

Another unique aspect of Flex real estate is that is can be done in phases. If you are developing your project in phases, you can sell the project in between or during a phase. The buyer can take over and continue with the next phase of construction. This strategy is especially useful, as many buyers are looking for projects where construction has already begun.

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Stabilized Exit

The last exit strategy is selling the development once it has been completed and stabilized. This means the entire flex space has been built and filled with tenants before selling. This exit will make you the most amount of money but will also require more time. A stabilized exit also means that your development will be completely cash flowing.

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BONUS EXIT: Hold

This "exit", is not truly an exit at all, but keeping your property for consistent monthly income. This means that the developer will hold, and manage, and maintain the property.With the right strategies in place, and automated property management, you can create true passive income through Flex Space real estate.

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To make the best decision regarding when to sell, you need to understand the time value of your money and the opportunity cost of selling at any point in time. By using these strategies, I’ve sold my developments for more profit so I can start new developments with more capital. To learn more of the best strategies for flex development, join me at Flex Space Untapped where I share the best techniques I’ve learned and used over the past 9 years of developing.