So, selling it gives you a lump sum of money that you can use to start a new business, invest somewhere and retire on, or whatever. Most businesses don’t sell because they wouldn’t sell for a substantial amount, but it’s still many entrepreneurs’ dream to build a business, sell it for a huge amount, and get the heck out of Dodge. I know a few people who have done this, and I am insanely jealous.

II. Why Real Estate Investment Companies Are Different

The reason I’m jealous is because not all business types are able to do this. Some businesses rely so much on the owner and their specialized expertise, that it would be hard for a new owner without that same expertise to jump in and make it work. Like a law firm. Or a doctor. Or, regrettably, a real estate investment company that flips and or holds property.

The best that we can hope for is to sell whatever assets we’ve accumulated. For doctors and law firms, those assets are customer lists, supplies, and maybe the building they are in. For us investors, it’s our properties and that’s it. Our companies are only (perceived to be) worth whatever we can sell our properties for.

I think that an investment company is scalable. I can picture a company that buys and sells 100 houses per year and only has a tiny office of staff. But when is the last time you’ve heard of a real estate investor selling their business? I haven’t. It just doesn’t happen. Instead, we’re just looked upon as individuals with real assets that we could sell off, and I doubt any investor would pay market value for them.

III. But at Least You Can Automate It

You can even write systems for your real estate company and get it to the point where it practically runs itself without you. But no one cares. So, if you can’t sell your company, you might as well make life as easy as possible and systemize it for your own benefit. Map out who does what, write the systems, and hire the right people to run them for you and give you reports.

And, if it’s creating cash and equity profits year after year anyway, this may not be such a bad thing. You just need to know what you’re getting into. So while individual houses have multiple exit strategies, your investment business as a whole has two:

1)Sell off all of your properties and liquidate the company.
2)Own the business forever—keeping your properties, maybe buying more, maybe selling some.

I opt for #2, but encourage you to make your business as easy as possible to manage for your own sake.

Alan Brymer