They can be. Here you convert an apartment building into condos. The opportunity comes from the conversion.

For example, a single apartment’s income may be $10,000 gross a year. Using a multiplier of 10, we learn that its sales value is $100,000. If you have 10 such apartments, you have a $1 million building.

On the other hand, condos in the area with the same square footage as the apartment may be selling for $300,000 apiece. If you convert the rentals to condos and sell 10 of them for that price, suddenly your building is worth $3 million. You’ve tripled the building’s value and increased your profits.

Wise investors know that things don’t always come up roses. Thus, they have a plan for getting out of a property if things turn bad, which happened, for example, during the real estate recession of the mid 1990s when prices in many areas of the country dropped as much as 30 percent. When prices fall, if you are highly leveraged, you can quickly become upside down. That means that you owe more than the property is worth. Here are some typical escape plans that investors have used.

Escape Plans

Dump It.