"Flip" Instructions? - Posted by Young Buck


#1

Posted by Redline on December 16, 1998 at 13:16:55:

I consider it flipping either way, just maybe: wholesale flipping is when you flip to another investor (wholesaler) or retail flipping (when you flip to a retail buyer) or just plain flipping out, which I do on a daily basis.

RL


#2

“Flip” Instructions? - Posted by Young Buck

Posted by Young Buck on December 13, 1998 at 16:30:58:

I have been reading a lot of the messages that deal with flip deals but noone explains how they did it. They just mention it.

  1. How many diffrent ways can you flip a house?

and

  1. Can you flip a house just by putting a contract on it?

#3

Re: Flip Instructions Here they are - Posted by Doug

Posted by Doug on December 14, 1998 at 03:20:01:

Joe had a good approach to a quick contract assignment and the other guys also have a good point as you wil only really learn if you read and meet others doing it. But hear is one of the ways I do… Like Joe said it all starts with getting a contract on a property but more imortantly you must get a good price to make some money on it… I dont touch a deal unless there is at least 80% LTV… Ok now you got the contract and you need a buyer. Heres the way you do it. You offer the property for sale and start showing the property to potential buyers( Of course in your contract to purchase you will need to put And or as assigned after your name and also in other terms you want access to the property to show to potential renters show you can show it). Now once you find someone interested in buying it from you , You sign a contract with them contingent upon you purchasing it ( to protect yourself from specific purpose issues incase you cant buy it and they are expecting you to sell it to them) Now you get the applicant to fill out a loan form and authorization to release credit. You next pull his credit and see if you can sell him the home owner financed and sell the mortgage to discounters. But thats another lesson entirely. Anyway you call me up or anyother note buyer and ask them if they would table fund a simultaneous closing flip… Most of the note buyers( like myself) are familiar with this and they will assist you threw the rest of the deal…Good Luck

Douglas Timko

Any other Advice email me

Notes4sale@yahoo.com


#4

Re: “Flip” Instructions? - Posted by Joe Kaiser

Posted by Joe Kaiser on December 14, 1998 at 24:20:57:

Hey YB,

Here’s the short course on flips . . .

Flips are really cool for this reason - the dough. I can make about $10 an hour painting houses. Not bad for grunt work. But, I can make literally a thousand times that amount sitting at the seller’s kitchen table (and I don’t even need a drop cloth for that).

Flipping means we strip away everything but “doing the deal.” I show up at the seller’s house and with any luck an agreement gets signed off. If I’ve done my job properly, I walk out an hour or so later with a contract to buy that thing on the cheap side.

That contact can be worth an instant $2k to $10k to me. If I’ve set things up properly, I can pass that contact on to someone else who will gladly pay for the right to step into my shoes.

Eventually, you’ll end up with a handful of investors waiting for you to call so you can meet them at Denny’s and they can write you a check.

Of course, there’s a bunch of things you need to have figured out ahead of time to pull it off elegantly, but once those things are in place it’s not hard at all.

Joe


#5

Re: “Flip” Instructions? - Posted by Alex

Posted by Alex on December 13, 1998 at 23:30:24:

Buy a RE course, talk to other investors, go to a RE seminar or read up on Real Estate books like all the rest of us did.


#6

FLIPS-R-US - Posted by Redline

Posted by Redline on December 14, 1998 at 11:42:14:

Actually, I flip off people in my car all the time …

No, seriously. You can flip a house easier than all this. Just follow the beginning explanation (get good price, get contract on it) and just ASSIGN your position to someone else. They pay you $X and you walk away. They close, and get the house a few days/weeks later.

Now, sure there are things to work out (provide SOME idea of clear title, make sure there’s enough profit for everyone, don’t be too greedy, get all your CYA docs in order, get your new assignee approved by your seller).

This way, you get paid up front (Ala Joe Kaiser) and you walk away. You make a couple bucks ($2-$10k let’s say) and the rehabber gets his $15-20k that he’s probably looking for.

Do 8-10 of these a month for a couple of years, and retire early and wealthy. :wink:

RL


#7

Re: Flip Instructions Here they are - Posted by JPiper

Posted by JPiper on December 14, 1998 at 11:04:31:

Whew!! That’s alot of work.

Somehow I’ve survived all these years and never done a flip like this.

My impression of these types of deals is that they are good for the note buyer. Personally, I would rather do this type of transaction with a nonconforming lender. I think the numbers will work out better for the flipper. My belief is that the discounts and LTV requirements exceed the closing costs available through non conforming lenders. In many cases the loan program is more attractive to the flipper and the buyer than the note purchase.

But I’m open to proof to the contrary.

JPiper


#8

Re: Flip Instructions Here they are-CORRECTIONS - Posted by Ed Wachsman

Posted by Ed Wachsman on December 14, 1998 at 05:32:20:

Doug you said: “I dont touch a deal unless there is at least 80% LTV…” I’m assuming you meant an LTV no more than 80% - and I believe most on this site would agree that you better have a buyer in your hip pocket to pull that off with regularity - unless you are talking exclusively about never closing - that is, walking from a deal if you can’t close for lack of a buyer. 70% and lower are much better, safer numbers and flipping wholesale to other investors usually is a much safer (once you’re sure of their ability, in terms of knowing someone can close, much faster flip.

Doug you said “specific purpose issues.” The term is “specific performance.”


#9

Re: “Flip” Instructions? - Posted by JHyre in Ohio

Posted by JHyre in Ohio on December 14, 1998 at 10:45:09:

Mighty Helpful. Friendly too. With advice like that , no one should ever ask questions on this chat channel.


#10

Young buck speaks - Posted by Buck Off

Posted by Buck Off on December 14, 1998 at 24:58:01:

Boy, that was profound.

What he meant to say was, “good question, I wondered that myself a couple weeks ago until I…”

On a serious note:

Good luck, and I would suggest going to the

“How To” articles and reading up on some of the listings on that subject.

Happy reading.


#11

Re: FLIPS-R-US - Posted by damion s newton

Posted by damion s newton on December 14, 1998 at 19:47:20:

I am new at this. What do you mean by providing some idea of clear title? Also what are CYA documents?


#12

Re: Flip Instructions Here they are-CORRECTIONS - Posted by Doug

Posted by Doug on December 15, 1998 at 24:58:29:

Redline and Piper both are correct in there explaination of flipping. It is alot easier and cleaner to do it there way… I call that flipping contracts since you never actually take title to the property. And Piper was also correct when he said that the new non conforming Industry is very easy to work with on these types of deals… The way I explained it is a method I had learned and was very successful in using so I figured I would share it with the board…
I also want to THANK Ed Wachsman for correcting me on my use of specific performance as he is correct I accidentally used the term purpose as it was almost 4am when I posted the mesaqe


#13

Re: FLIPS-R-US - Posted by Redline

Posted by Redline on December 14, 1998 at 21:59:53:

Some of the more experienced guys on here talk about doing some preliminary title work on the property to show the wholesale buyer up front, that he/she has a good chance of getting clear title somewhere down the road.

Remember - in this scenario you’re looking to get paid BEFORE the close so you’ve got to give the buyer SOME indication that he can close on this property. He will do his own title checking, but a little work on your part will help him along in writing you a check.

CYA docs are ©over (Y)our (A)ss ets documentation.
(i.e. a good solid contract with all i’s dotted and t’s crossed. Plenty of escape clauses and everything thought about BEFOREHAND!)

RL


#14

Re: Flip Instructions Here they are-CORRECTIONS - Posted by Brad Crouch

Posted by Brad Crouch on December 15, 1998 at 21:38:14:

Doug,

What you’re describing . . . wouldn’t it be called “retailing” rather than “flipping”? Or would this be “flipping to a retail buyer”?

Brad


#15

Re: FLIPS-R-US - Posted by Jackie in Dallas

Posted by Jackie in Dallas on December 15, 1998 at 19:47:56:

Actually, it’s a better idea to make sure the title is completely good - not just reasonably good.

The last thing I want to do is burn a perfectly good “partner” by making them think I tried to pull one over on them. It’s suppose to be a team effort – not only do I find properties for them, but I make sure it’s an iron clad great deal (good title and all)-- in exchange, they pay me TOP DOLLAR for my deals. My buyers don’t want any loose ends to deal with.

If you do your job right, you build a good relationship with your buyers, they trust you to do the homework on the property and you trust them to be there with the cash (lots of it) when you call with another house.

If you stick a buyer with a house with title problems or any other problems that are not disclosed up front, chances are they will NEVER work with you again. And in the investor community it doesn’t take long for word to get around.


#16

Re: FLIPS-R-US - Posted by Joe Kaiser

Posted by Joe Kaiser on December 15, 1998 at 17:52:19:

Just a minor point, you don’t need “plenty of escape clauses.” You just need one good one, period.

An agreement littered with escape clauses won’t pass muster.

Joe


#17

Re: Flip Instructions Here they are-CORRECTIONS - Posted by Doug

Posted by Doug on December 16, 1998 at 09:33:07:

Flipping is when you flip something no matter what it is… I am glad you brought this point out and Hope that Joe Kaiser doesnt accuse me of a FAKE POST HERE…hahahha…Anyway… I hear alot about people flipping contracts to Investors and they are calling it fliping property… I call it fliping contracts not properties because you never hit title to the property so you didnt flip the property… I flip properties… I hit title of the property for about 1 second… I sell the same day I purchase it simultaneously… An assignment of contract is called a contract vende…
Douglas Timko
notes4sale@yahoo.com


#18

Re: FLIPS-R-US - Posted by Redline

Posted by Redline on December 16, 1998 at 12:46:13:

Understood.

Now, my question is: How do you search the title to present to your buyer? Do you do it yourself or get a title co? What paperwork do you provide him/her?

RL


#19

Re: FLIPS-R-US - Posted by Redline

Posted by Redline on December 16, 1998 at 12:47:08:

Yes, now that I read what I wrote it sounds hokey. I stand corrected by the gods once again. :wink:

RL