MicroFlipping – Real Estate Contracts

Flipping real estate contracts is much different than flipping real estate. This process is usually quicker than a full real estate flip and flippers are known as wholesalers in these instances. New investors may find lucrative opportunities in this arena but understanding the process of flipping real estate contracts is essential to success in the business. Keep reading for more information on the pros and cons of flipping real estate contracts.

 

What does it mean to flip real estate contracts?

To flip a real estate contract, an investor is awarded the rights to buy a property. They can then sell the home to a buyer at a higher price. The investor’s profit comes from the difference between the price they sell the contract for and the price the original seller asked. This profit is known as an assignment fee, and the investor earns it when they act as an intermediary.

 

How to flip real estate contracts

Flipping real estate contracts is a great example of how to buy a house with no money. You can start wholesaling with little to no money of your own. As the wholesaler, you are not responsible for paying the down payment, closing costs, or any renovation costs.

 

Wholesaling, or flipping real estate contracts, is significantly less risky than flipping houses or other forms of real estate investment. You do not have to risk your own finances to successfully carry out the process, and you can obtain the assignment fee in a relatively short amount of time. However, there are some important steps in flipping real estate contracts.

 

Find the right property

It takes more than just finding a great property to flip real estate contracts. You should look for a seller who is motivated, so they are willing to sell the property quickly and for a lower price. You can find records of delinquent mortgages and compare with available homes to find motivated sellers. This type of property will increase your chances of closing in a timely manner.

 

Negotiate the contract

This step is extremely important because it can protect you from potential financial liability. Your intentions for selling the contract should be clearly stated. Ensure that your contract allows you to assign it to someone else before the settlement date. You should also include contingencies to release you from the contract if it is not sold.

 

Line up a buyer

If you have been flipping real estate contracts for a while, you have likely built up your network of investors and flippers. When you set out to complete a real estate contract flip, you can already have a buyer in mind. Compile a buyers list to identify anyone who would be interested in your property. You will likely be selling to real estate flippers who will put in the time and money to renovate the property. With a buyer already in mind, you can complete a real estate contract flip in just hours.

 

What does under contract mean?

When a property is under contract, an offer has been made on the home and the seller has accepted the offer. However, the sale is not final. There are typically contingencies built into a contract that prevent the sale from closing until all conditions are met. For flipping real estate contracts, these contingencies usually include an investor finding a buyer to purchase the property. If the conditions are not met, the house can go back on the market and be sold to a new buyer.

 

Conclusion

Flipping real estate contracts is a great way for new investors to dip their toes in real estate. You can easily become familiar with the homebuying process and learn a great deal about the properties in your area. This knowledge can later be translated into house flipping and renovating, or continued contract flipping.

 

For investors looking to flip real estate properties, Wealth 212?˚ can help you get the funding you need. They offer a unique way to flip real estate without spending money thanks to their funding platform. As a member, you can also benefit from the vast knowledge and resources they offer to new and experienced flippers.