Flipping notes to another investor is an excellent way to start investing in notes. This strategy allows you to turn into a very successful business with a few small transactions. When you flip notes, you can secure large sums of money quickly. The pace of the note business lends itself to help you convert your effort into cash much quicker than traditional real estate strategies.
Flipping Notes Is Different
Typically, when we write about flipping, we mean in the context of flipping the actual property. However, when individuals talk about flipping houses, they simply mean buy the house and sell the house – fast. There are several things to consider when flipping homes, not just how you buy, but how you sell as well. Flipping notes, in contrast, is wildly different.
You can start searching for notes, and you don’t have to have cash in hand to buy it. There is reduced risk, as well. You don’t have to have massive initial costs, a lot of time and a lot of risks. You can flip notes from anywhere compared to flipping houses were, in general, you need to be local. Once you begin flipping notes, you just need a telephone and a laptop.
Flipping Notes Has Its Value
Many individuals find flipping notes appealing for the following reasons:
1. The soft flip; you are selling to another investor a part of your notes – The soft flip term was coined by JD Crouse in a seminar about our generating profit. JD explained in the workshop how a note would be put into negotiation and then closed down, selling a quarter, that is part of the transactions to another investor and then closing off the softer flip, as he is kept for himself part of the bill payments, using some of his funds and investors funds.
2. The Straight Flip is a sale to other buyers, as you buy notes at a loss. Since the real worth of note is much more ambiguous than the value of the property, especially when they are inefficient or under-performing, some margins can be generated. The reason why the benefits are more subjective is that the borrower, the market, the collateral position of the bill, and the other bonds on the property are many more components for evaluating the value. It is this subjectivity that enables you to build into a functioning margin.
3. The Assignable Contract Flip, in which the notes are put under contract and the assigned contract, then sold to the end purchaser. This could be the most carefree flip because you just sell the deal, literally. If you put a package of notes at a discount where you’ve done the research to find the seller negotiate the price and sign a contract, then any retailer worth it’s salt is willing to pay you a fee for your research when you turn the notes on it.
Flipping Notes Is More Than Money
The primary benefit of flipping notes over flipping properties is that no significant investment has been made in renovations or upgrades that increase your value rather than spending with the creditor to help enhance the house. Another great advantage of flipping notes is that the asset class is already so attractive to investors that you should have investors ready when you can find the notes as long as they are reasonably priced. One other upside of flipping notes is that it can be bought and sold from almost anywhere. Many of the investors in the country have a portfolio of assets with many properties that they almost never see with their own eyes.
It’s a way to make money in your pajamas.
Flipping Notes Is Super Fast
Contrary to physical real estate, the acquisition and selling or brokering of notes is subject to very few policies and guidelines. Unlike a real estate deal that often needs checks, funding, and long processing times, most deals close quickly. It’s normal to see an agreement of 15 to 45 days from beginning to close.