| -- End Ad Box ---> | | | | under contract. Then, instead of reselling the |
| There has been a lot written about "flipping" real | | | | property (double escrow), the investor sells (assigns) |
| estate these last two years - and much of it is more | | | | the contract to another buyer. The buyer pays an |
| fiction than fact. Some say it is great way to make | | | | assignment fee -- usually $3000-$5000 -- to the |
| money fast. Some say it is very difficult. Some even | | | | investor at the time the contract is assigned. The |
| claim it is illegal. So, just what is the truth? | | | | investor does not have to participate in any closing -- |
| Let's take care of the "illegal" claims, first. Flipping, if | | | | he is out of the deal, and a few thousand dollars |
| done the way it was meant to be done, is | | | | richer. |
| completely legal. But it becomes illegal when | | | | That said let us look at claims that it is very difficult |
| unscrupulous investors, working with unscrupulous | | | | and time-consuming. Since the most difficult part is |
| appraisers or lenders, conspire to defraud either | | | | finding a suitable property, the rest of the transaction |
| buyers or lenders. This is done when an investor gets | | | | consists of negotiating the deal (no different from |
| an appraiser or lender to over-value a property for | | | | any other transaction), find a new buyer (also no |
| the purpose of selling for a higher-than-market value, | | | | different from any other sale), then wait until closing |
| or for the purposes of getting a bigger mortgage so | | | | when the closing agent takes care of everything else. |
| the investor can pocket more cash. In short, it is not | | | | Personally, I have never found laying on the beach |
| the flipping that is illegal -- rather, it is the fraud that | | | | waiting for a closing to be all that time-consuming or |
| sometimes accompanies it that is in violation of the | | | | stressful. And I have been using these methods for |
| law. | | | | over 35 years. |
| Such fraud is not necessary. You can use any | | | | Then there are the unfounded fears that for some |
| legitimate method of flipping, and if you remain within | | | | unknown reason, your seller and/or your buyer will |
| the law and act in an ethical manner, you will profit | | | | revolt at closing when they "discover" you are |
| immensely, and earn yourself a solid reputation as a | | | | making a profit. |
| good person to do business with. In the long run, as | | | | We can only assume that the investors who have |
| you gain a reputation for fairness and sound ethics, | | | | this fear feel it is necessary to keep it a secret that |
| you will actually profit more than if you were to | | | | they are an investor. I do not advocate that. I stress |
| defraud anyone. | | | | ethical conduct. Simply make sure your seller and |
| Now, as for it being difficult. Some so-called "gurus" | | | | your buyer are fully aware that you are an investor - |
| claim that in order to flip, the investor must first buy | | | | it is nothing to be ashamed of! If they know this, |
| the property and only then find a buyer to resell to. | | | | they will obviously know, up front, that you must |
| Let's put that falsehood to rest right now -- you can | | | | make a profit - you would not be in the deal, |
| buy and resell at the same closing (called a double | | | | otherwise. At closing there will be no anger because |
| escrow, or simultaneous closing) without ever having | | | | they were not deceived. In all my years of doing this, |
| to finance a single penny, because the buyer's money | | | | I have not seen one case where closing did not |
| funds both transactions. Under the law, neither | | | | complete because of such problems, because the |
| transaction takes place first or last in a double | | | | problems never arose in the first place. |
| escrow, regardless of which one actually is completed | | | | Yes, flipping is a great way to make a lot of money |
| first. Therefore, the transaction with your buyer can | | | | in a short period of time. And it, like any other |
| take place first, providing you with the funds to pay | | | | endeavor, can be stressful at times. It is not as easy |
| off your seller. In such a transaction, the only | | | | as many "gurus" would have you believe, but it is not |
| requirements are a) you contract to buy a property | | | | all that difficult, either. The secret lies in 1) knowing |
| from the seller at one price, then b) contract to sell | | | | which properties lend themselves to flipping , 2) being |
| that same property to another buyer at a higher | | | | honest and up front, and 3) using the right contracts, |
| price, and for both contracts to call for closing at the | | | | specially designed for flipping. |
| same time and place. Both agreements are placed | | | | I have developed a program that can teach you #1, |
| into the same escrow. The key, of course, is to buy | | | | and the program includes software that takes care |
| at below market value, and sell at no more than | | | | of #3. And if you are the kind of person deserving |
| market value, to avoid any possibility of fraud. | | | | of success, #2 should not be a problem, either - just |
| The reality is that there are a number of ways to flip | | | | be honest and forthright. If you would like more |
| properties, the double escrow is only one method. | | | | information on the program, please visit me at |
| Some methods require financing - others do not. | | | | So, now you know that "flipping" is legal, relatively |
| Some methods do not require cash or credit. And | | | | simple and requires no cash or credit. So, what are |
| most methods are quite simple to do. In addition to | | | | you waiting for? There is a lot of excitement in |
| the double escrow, the investor may also flip by way | | | | making money in this fashion! |
| of "assigning". In this technique, a property is put | | | | |