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Nobody can predict the future with undeniable accuracy, and sometimes things happen that nobody could have seen coming. When this does happen it can throw your plans into disarray and affect absolutely everything.
One of the worst things to happen is when your exit plan on a property falls through. This can affect your loan, the length of time a project takes and even the amount of profit you’ll make from the venture. So what do you do if this happens to you?
Acknowledge a Change in Circumstances
Trying to hide the fact that your exit plan has fallen through does nobody any good. The sooner you acknowledge that it has happened and make others involved aware, the faster you can go about finding a solution. If you were provided funding based on your exit strategy then you will need to talk to the lender as soon as possible to assure them that you will make alternative arrangements.
Figure Out What Went Wrong
If your exit strategy has fallen through then there is a reason for it. By figuring out what went wrong you can rebuild from that point – remember that it may not always be down to you. It could be that the buyer went bankrupt or they changed their mind. If this was the case you simply need to find a new buyer, which shouldn’t be overly difficult in the current economy.
However if the problem was at your end – poor construction, failure to secure a mortgage or lack of cash to complete the build – then you will need to do everything in your ability to rectify the problem. If the problem is finding finance to fill the gap between development and a long term mortgage then it may be worthtalking to a bridging finance broker who can get you the funding you need to fill the void.
Just because your first contact was agreed on ‘X’ amount of money doesn’t mean that you will get this again. Look at the current market, your competition and the number of buyers out there. In some cases you may be lucky enough to get a higher price, but more likely than not you’ll have to settle for less in order to make the sale go through.
Don’t be afraid to wait for something bigger and better to come along. If you’re getting quite a bit of interest then it may be worth waiting for better offers to roll in – set yourself an absolute bottom price you’ll accept and ignore everything under that.
The worst thing you can do in this situation is to admit defeat. Just because one exit plan fell through doesn’t mean that the whole thing is scuppered. By staying chipper you will have a much more positive outlook and are likely to finish off just as well, if not better off than you started.
If the main problem was financing then it could be extremely beneficial to use the services of a commercial finance broker. This will give you a better chance at gaining the vital funding you need to finish and exit as planned. Give Pure Commercial Finance a call today to find out how we can help you!