Net Exit Proceeds

Net Exit Proceeds refer to the final amount of money that a real estate investor receives from the sale of a property after all costs associated with the sale (or "exit") have been deducted. These costs can include items such as broker's commission, legal fees, closing costs, and any costs associated with paying off existing debt on the property.

The formula for calculating Net Exit Proceeds is as follows:

Net Exit Proceeds = Gross Sale Price - Selling Costs - Outstanding Loan Balance

For example, if a property sells for $1 million, and the costs associated with the sale (including paying off any remaining mortgage) total $200,000, then the Net Exit Proceeds would be $800,000 ($1 million - $200,000).

In the context of real estate financial modeling, the Net Exit Proceeds are used to calculate the final return on investment for the property. This is a key metric for investors as it represents the total profits from the investment, after accounting for all costs.