Wholesale real estate investing (i.e. \"quick-turn\" or
\"flipping\" real estate property) is conceptually very
simple. Here\'s how it works:
First, \"Investor A\" finds a great real estate deal with
a lot of equity. Typically, Investor A will have spent
a significant amount of time, money, and expertise to
find the deal, negotiate the terms, and get the property
under contract. By putting the property under contract,
Investor A now has control of the property, and the
equity in the property.
(For this example, imagine that Investor A has found a
property worth $200,000 and has set a purchase price of
$115,000 and he also knows that there are $15,000 in
repairs, which leaves an equity position of $70,000).
Second, \"Investor A\" finds another party, \"Investor B\".
Investor B recognizes that the contract that Investor A
has established is worth $70,000 in equity, and so he
strikes a deal with Investor A to turn the deal over to
Investor B in exchange for some amount of cash, called
an \"assignment fee\" (we\'ll use the value of $12,000 in
this example).
So Investor A is giving up $70,000 in \"potential\" profit
in exchange for $12,000 in current profit. And Investor
B is paying $12,000 because he believes he can make more
than that on the deal, since there\'s a full $70,000
of equity built in.
This deal between Investor A and Investor B is called
an \"Assignment\", because Investor A is assigning the
contract to Investor B.
Third, Investor B does his \"due diligence\" (i.e.
inspections, appraisals, etc.) to confirm
that the deal is as good as he thinks it is.
Finally, Investor B closes the purchase of the property,
and Investor \"A\" receives the assignment fee from
Investor B.
This is, obviously, a simplification of the process.
But this is essentially how the \"quick-turn\", real estate
flip deal works - not so difficult now, is it?
Now, go get the deals! Not sure where or how?
I can show you...
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About the Author:
Though a relative novice in the real estate arena,
Alain Diza catapulted to rapid financial success with
his uniquely simple marriage of Internet Marketing
and Real Estate Investing. To see a sample of his
strategies, and to answer the question in the above
article, visit Alain\'s private website at:
http://www.tm-RealEstateInvesting.com |