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Flipping a Property You Don’t Own
As a full time real estate investment professional, you need to create business for yourself that is not solely hinged on you coming up with money to put into every property acquisition. That is not really a business… that is only an investment.
That process can also be buying yourself a job …as a renovator, or buying yourself a job as a landlord. Both of these are far too dependent on using your time to make your profit happen. As a professional real estate investor, we have to make the best use of our time, which is our most precious commodity.
In this article, I would like to discuss flipping properties that you don’t own. We all understand the concept of flipping a property. To most people, flipping is purchasing a property (with their own money), putting more money into it as a renovation, and then flipping it to an end buyer. Or one can buy a property from a builder, wait until the build is complete and sell it at an appreciated price.
These are very speculative ways of making money and can backfire on you. They can cost you a fortune in time, money and in the liability that comes along with property ownership. Flipping a property that you don’t own is one aspect of having a full-time real estate investing business.
Networking system
In order to begin creating our business , we need to have potential deals coming to us all the time. Not just form our realtors or team members, but from a whole networking system that we have created (as discussed in prior articles).
To begin the strategy, you need to have somebody call you up that needs your service… they need to sell their property quickly. You need to have a network of investors or end buyers in place that are looking for specific types of properties. (you would already know this because you have them categorized in your database) Once you know what people are looking for, you are better able to fulfill that need.
Tie up the contract
When you “tie up” a contract and have negotiated price, terms, and a due diligence period, you are now able to show the property to other potential investors or an end buyers to see if they would like to buy that property. If they do want to be the end buyer of that property, you, through a series of documents, are able to assign that property to the end buyer or investor, allowing them to close on the property.
Make your fee
Of course, you are entitled to a fee for that. Make your fee will in keeping with what ultimate price that the end buyer is paying. Make sure the price that they pay you, coupled with their purchase price, will still be a very good deal for them regardless.
Now you have “flipped” the property that you have never owned, that you have never taken a mortgage out on, that you have no liability in. Nobody has asked to pull your credit, no one has asked for a job letter or employment verification, or anything of the sort.
This one facet of your business can create a lot of steady income for you, if you have the network and marketing to bring properties to you.
Canadian Wealth Builders offers many unique, practical, “out of the box” real estate investor trainings which offers the student hands on, in the trenches style instruction to facilitate both a different mindset as well as a successful and lucrative real estate investment business. To find out more, please go to www.canadianwealthbuilders.com.
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An article by Gord Lemon
Gord Lemon has been investing in Canadian real estate for over 25 years. He has been a real estate investment trainer since 2002 and is co-founder of Canadian Wealth Builders. To read more articles by Gord Lemon |
Topics: Marketing | 1 Comment »
One Response to “Flipping a Property You Don’t Own”
Comments
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October 13th, 2009 at 10:37 pm
Very nice, straight to the point article about “assignments”! From this article I learned that although the concept of an assignment may seem quick and easy, one should be set up properly to do so. To execute this seemingly simple real estate strategy, takes prior planning and organization to complete efficiently. As Gord said, one should have a system in place where there is a regular flow of incoming properties and also a network in place to “flip” the deals to. I, as a beginning Real Estate investor am looking forward to learning this from Gord and Navtaj!