Posted by MichaelR (NoVA) on October 26, 1998 at 13:24:05:
Javier,
There is no reason to share your profits from a flip. By the very definition of a flip, you don’t need cash in order to purchase it. You use the funds of the person your are flipping to (simultaneous close) or just assign the contract to wash your hands of the situations.
Make some luck!
Michael
Please, tell me what’s better in my case… - Posted by Javier
Posted by Javier on October 26, 1998 at 12:38:49:
I am a newbie with zero (o) money to invest. I read the article by Scott Briton about generating cash first.
It makes sense to start working on Flips prior to lease/options in order to generate some cash I do not have. But on the other hand, I need cash to buy that first property below market price. I think I may try owner financing…but is there any other wat to start? Is flipping a good point to start? what are the disadvantages?
I may find someone in the RE club who is starting too and wants to share profits from a flip. But if I have to start on my own, what do you recommend and why?
Thank you…I know I’llget a lot of help.
Javier Serrano
Hmmm… - Posted by Mr Donald (NORVA)
Posted by Mr Donald (NORVA) on October 26, 1998 at 19:14:39:
Try reading ALL the material on this site to get a comprehensive grasp of ALL your available options. There’s a myriad of techniques waiting for you to explore - if you take the time to learn them properly, and understand them too.
Cash isn’t necessarily needed, nor is credit - but both of these help tremendously. Lease/option without cash is a bit tricky (to say the least), but flipping with a minimal amount of earnest money might be possible if you find the right deal.
Ideally, as you become more advanced and experienced in the RE game, you’ll find there are certain subtleties that will give you the edge over the common man. Mind you, we’re not talking about any trickery, deception or fraud here - just about giving yourself the best possible terms for your end of the deal.
In MY buyer’s contract I use something similar to the following:
“…The Purchaser shall tender earnest money (?Deposit?) in the amount of ? $ _____________________________ by check and/or ? $__________ by note due and payable on __________________________ , 19 _____ , to be held by the Settlement Agent of this transaction…”
So your Settlement Agent - whomever you prefer - holds the deposit, not the Realtor’s Agent or the Seller or anyone else.
Furthermore, here’s another clause, for instance, that can yield great advantage when properly inserted:
“…The Purchaser agrees to contact the Settlement Agent within 15 Days of Contract Acceptance to schedule settlement…”
Innocuous to most, but powerful for me because yet another clause could state the following:
“…(?Days?) means business days, exclusive of Saturday, Sunday and legal holidays, unless otherwise specified…”
So, if you’re on a limited budget, or funds are tight or you simply want to assign that Contract to another party - and you have NO cash on hand when you sign the Contract, there’s about 3 weeks of time to get your act together.
Amazing what a little bit of creativity can do to make your deals work in your favour.