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In this lesson, you will discover the 5 simple steps to engage the lucrative opportunity of flipping real estate contracts for cash in the digital age. It wasn’t always this easy but I want to give you some perspective that can simplify how easy this has gotten.
During my master’s degree education which I started in the fall of 2004, I became quite exposed to the different possibilities beyond the 40-40-40 income plan.
If you are not aware of the 40-40-40 plan, it’s simply working 40 hours a week to make $40,000 per year with no hopes of retiring or living life on my terms for another 40 years.
So I started exploring a few non-conventional career opportunities. Then my pastor mentioned real estate and the first thing I thought about was this.
I was a broke college kid with bad credit. “How tha hell” was I supposed to buy houses?
After a little research, I realized quickly that investing in real estate isn’t always about investing cash. I learned that I could invest time, skills and sweat.
In fact, there are a few real estate investing strategies that you can invest time and skills in and make upwards of $10,000 from one deal in a short period of time.
One Of Those Strategies Is Flipping Real Estate Contracts.
The core-starting goal is to find motivated sellers. These are sellers who are in possession of a piece of property that has become a liability.
Most people think real estate is an asset no matter what. But that’s false because it depends on its function and impact on a bottom line which is someone’s net worth.
If it’s adding money to it, it’s an asset. Otherwise, it’s a liability. It’s not an asset simply because it is a piece of real estate.
So once you find a motivated seller who is willing to sell, you will negotiate a deal based on 65% of what it is worth fixed up and adjusted for repair cost, lock the property under a purchase contract and flip the contract for $10,000 or more.
First, we need to find motivated sellers.
So let’s dive into the 5 stages involved in flipping real estate contracts for cash all without necessity for a real estate license, any experience, expertise or cash for capital.
Stage 1 – Data
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There are multiple databases that properties get recorded on when they are in distress. Vacant properties, pre-foreclosure, tax delinquency are just a few of them.
One of the most efficient ways to find motivated sellers is to pull these types of data, sort and process them on a regular basis.
Back in the days, you would have to physically go to the government county house. But these days, you can access them and even more data intelligence at www.EmpireBIGData.com
Stage 2 – Contact
After pulling data from stage one, I want you to set up and initiate contact with the individuals who own these properties in distress.
You can do so by setting up outreach marketing campaigns that attract them to initiate contact with you and you can outrightly reach out by text messages or cold call.
My preference is the latter. However the most important factor is to make sure that you create or employ a system that removes you emotionally from the process.
It is a numbers game.
Stage 3 – Lead
TRENDING: A COMPLETE GUIDE & BREAKDOWN OF REAL ESTATE WHOLESALE ASSIGNMENT CONTRACTS – FREE DOWNLOAD
No leads No money. This is true in every business and also in the contracts flipping business.
But what is a lead? A lead is a person who has expressed an interest in selling a property.
Just because a contact has been initiated does not signify a lead status. What makes it a lead is an expressed interest which is what initiates the price negotiation process.
Stage 4 – Contract
After a successful price negotiation which means a seller is willing to sell their property at a price of 65% of the after repair value (THE ARV) minus the estimated repair cost or less…
It is time to write up an assignable real estate purchase contract with the term and the agreed price.
65% is just a guiding rule and that means there are some exceptions where you could afford to offer more. Those exceptions are beyond the scope of this lesson.
The contract represents your equitable rights and interest in the deal.
Speaking of the deal…
Stage 5 – Deal
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Once you have the contract signed by you, as the buyer, and the seller, you are now at the stage where you can flip the contract for cash.
What I want you to do at this stage is to connect with other investors and find a cash buyer to assign your contract to at around 70% of the ARV.
You can also find cash buyers at www.EmpireBIGData.com
Whatever the spread between 65% and 70% is would be your assignment fee. So for a $200,000 ARV, that is about $10,000 or more depending on your negotiation skills.
Again 65% and 70% are the fundamental guiding rule which means there are exceptions that we will discuss later.
Tell me in the comment area any questions you may have and which of the 5 stages you want me to dive in deeper on and I would be happy to create another lesson around that.
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