Flash Flip Profit Model
When Wholesaling won’t work Flash Flip for Cash instead
When Conditions are right a Flash flip can make you even more!
The Flash Flip Profit Model is a fast and easy way to make quick cash without actually owning Real Estate. More commonly known as a double close, you make your money when you Flip a property to cash-heavy buy-hold investors. The Flash Flip is a very viable fast money strategy for today’s market.
What is a Flash Flip and How Does it Work?
A Flash Flip occurs when an investor-buyer negotiates a purchase agreement with a seller, but has no plan of purchasing the property or taking possession of it. In a Flash Flip, the investor executes a formal sales agreement just as in the case of a Contract Assignment. Once the investor and seller have executed a formal agreement and the investor has control of the property, the investor-buyer sets out to find a third party buyer. The investor-buyer makes money by selling the property to an end user or another investor. The process is handled in a double closing in which the investor-buyer actually closes on the purchase transaction and then immediately turns to a second closing to complete the sale to the new buyer. With a Flash Flip the investor-buyer can collect a higher fee than in a contract assignment. The Flash Flip strategy can also be used to flip an otherwise un-assignable contract.
One of the best parts of the Flash Flip Profit model is that it can be done with none of your own money. That’s right, with the help of a good title agent and a Transaction Funding Source a Flash Flip can be closed using none of the investor’s personal funds.
Of course you should have a basic understanding of contracts and marketing. An investor friendly title company is a definite plus, due to the unconventional (but perfectly legal) ways you might have to get paid at closing escrow. A Transaction Funding Source also makes it easy to complete a Flash Flip using none of your own cash.
If you have no cash, but have a credit card or credit line, you might need it to pay minor expenses. When using Profit Models such as the Flash Flip and Contract Assignment, it is advisable to have a list of investor buyers who like to buy these deals. With a strong buyers list you will find it easy to do several of these deals each month.
Another option you can do with a flash Flip is to sell the deal to an end user (owner occupant). If you decide to do this, then you will want to use a skilled title company who can properly arrange the closings and communicate with your buyer’s lender. Be certain your closing agent knows your doing this double close transaction or you may find your buyer gets denied funding and is unable to close. That is usually caused by what is called Seasoning on the title, but a good closing company will know how to prepare the documents in such a way as to not tip off the buyers lender and help to assure a smooth closing.
When selling to another investor, sell your concept to potential investors in advance. This can best be done by advertising free list of discount properties. Then when you actually find an opportunity and lock up with a contract, you can offer the deal to your buyers list and have it sold before the ink is dry on your agreements. .
Flash Flips are a bit more complex than Contract Assignments since they utilize multiple agreements, such as agreement for purchase with your seller, and another agreement for sale with your buyer. Using a Flash Flip, an investor-buyer can make money without having to be a licensed real estate agent,
Due to the use of a double closing in a Flash Flip, the investor-buyer can increase the sales price on the second closing make more money without having to reveal the full amount of profit to the buyer.
Although the investor (you) only takes title to the property for a short time, (from a few seconds to 24 hours) you do not have to show up on public record as the seller or owner of record. For all intents and purposes, a Flash Flip enables the investor buyer to virtually become the seller, getting all the benefits without the risk.
In today’s market, most conventional lenders and title companies have become increasingly difficult when it comes to funding purchasers on Flip properties. Most guidelines will limit your sales price to a max of 20% over your purchase price. To be safe in this margin and to help complete a successful deal work closely with your closing agent and keep your sales price no higher than 15% above your purchase. Still, I am sure you agree, that any deal you can sell for a profit of 15% higher than you paid without getting your fingers dirty, it is a good deal.