Real Estate Contract Assignment House Flipping Strategy or Wholesaling is a fast and easy way to make "Fast Cash". No need to buy or own the property. You don't even need money or credit for this strategy. You just need a property under contract.
First of all a Real Estate Contract Assignment is when you negotiate a sales contract with a seller. You don't close or take possession of the property. Instead you sell the contract to another person. You make money by collecting an Assignment Fee. Fees are usually between 3K to 10K depending on the property value. This fee includes reimbursement of any deposit. This is the simplest, and least risky house flipping strategy that equals Fast Cash.
All you need is a basic understanding of contracts, and a few marketing strategies. In some cases, you may need a little cash for whatever earnest money deposits the seller may require up front. But don’t worry, you can get that back at closing.
Funding the Earnest Money Deposit
No cash. No problem. Earnest money deposits are usually $1,000. However it's determined by the seller so deposits might vary. You can put it on a credit card. Then you can pay the card off once you close and your assignment fee is in the bank. Never give the deposit directly to the seller. Always hire a title company or real estate attorney to keep your deposit in escrow. Remember Real Estate Contract Assignments only work with cash transactions and private money financing (i.e. Hard Money Lenders, private lenders, etc.).
You're Not a Third Party Buyer
When you talk to sellers you are not a “third party” looking for a property for someone else. At all times, you are the Buyer. Potential sellers must have good faith that you (or your assignee) will close on the contract. Sellers can smell a tire-kicker. Be genuine in your negotiations. Negotiate as if you're purchasing the property. You never want the seller to assume your a third party practicing real estate without a license. Operating as the Buyer will also keep you out of trouble with real estate licensing authorities.
Simple & Least Risky Real Estate Transaction
With a Real Estate Contract Assignment:
- Fast Cash
- Short turn around
- No Real Estate License Required
- No Contractual Obligation to Purchase
- Little to No Money Down
- No Closing Costs, title fees, or conveyance necessary
- Not responsible for filing paperwork with county public records.
Contract Assignment Process
- Find a Motivated Seller
Your motivated sellers are people who have to sell. Focus on the 5 D's: dealth, divorce, disease, distress, displacement. People who are dealing with these life issues usually need to unload there properties quickly. There also unsually willing to take a discount offer and not hold out for top retail dollar.
- Negotiate terms & get a signed Contract
The best deals always come when you meet your seller's needs. For example I just closed a $10,000 deal. I had managed the property for years and the owner got cancer and was dying. He needed to sell as time was short and he didn't want his daughter to have to deal with the property after his passing. So, I asked what he wanted out of the property. He just didn't want to have to do any repairs or updating. That was easy. He took our fair offer and we flipped the home to an invertor who planned to do the rehab.
- Submit contract and earnest deposit to title
Once you have a contract submit it to a title company or real estate attorney. They will start the title process and hold any earnest deposits in escrow. Never give the deposit to the seller.
- Find a Buyer and assign the contract.
It's simple to find an investor buyer. Put a listing up on craigslist. Place some bandit signs. Attend you're local real estate investment club. All cost little to no money and you'll be able to flip the contract in no time.
- Close and Get Paid.
On the day of closing you go to the title company and pick up your check and get paid. You don't attend the closing or have to do anything else. The title company will handle the rest of the transaction.
It's really that simple. So get out there and find a deal. Put it under contract. Flip it to a seller and collect your fee.