For many people looking to invest, flipping contracts is a huge attraction. Considered by many investors as a quick way of making a profit, this has become a lucrative niche for many in the real estate industry.
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Money muling is a form of money laundering. If you’re convicted, you could get up to 14 years in prison, and a criminal record for the rest of your life. Getting involved in money muling could have serious and long-lasting consequences for you.
Yet, for flipping real estate contracts to equal monthly profit, it can take a little bit of prep work beforehand. It also helps here to have a good deal of knowledge of the real estate marketplace itself.
Here we discuss the process of flipping real estate contracts, offering advice on how to do it successfully. We also consider those areas where you may need to pay more attention to. This means concentrating solely on achieving that fantastic $5000 to $15000 monthly profit each time.
How to Make $5000 $15000 Month Flipping Real Estate Contracts
The Process Involved in Flipping Real Estate Contracts
It’s worth noting that the process involved with the flipping of contracts differs from that involved with flipping actual physical properties.
Thus, we need to differentiate between the two:
Flipping Houses: More of a long-term strategy, flipping a house typically means you buy it, fix it up and flip it to a buyer. This means factoring in time to do all this work – alongside then waiting while it’s listed and sold. Making a profit this way can take some time, and this profit most likely won’t be achieved in the space of a month.
Flipping Contracts: Sometimes referred to as wholesaling, rather than buying the house, you tie up the purchase contract instead and then sell this onto another investor. This allows you to make a quick profit. Thus, there’s no need here to buy a physical property, no need to spend time or money fixing it up, and you don’t have to list it to receive payment. Thus, this is a shorter-term strategy.
Why Do People Prefer Flipping Real Estate Contracts?
Besides making a good quick profit, there are also several benefits and advantages involved in flipping real estate contracts:
- Flipping contracts is usually the best way for many to get started when first beginning in real estate
- There is no need to obtain a license to begin flipping in this way
- You don’t necessarily have to have previous real estate experience
- You don’t need money to start as you won’t be purchasing physical property
- You don’t have to commit time to work on a property
- House flipping can in many cases offer you money in your hand within 30 days
- You can make more and more deals in the space of one month
- Contracts can be flipped in other virtual markets
- You can look toward teaming up with other investors to flip contracts
- Flipping contracts tend to work well, regardless of how the market is behaving
- This can be the first step toward fixing and flipping
How Do I Flip Real Estate Contracts?
For many experienced real estate contract flippers, the key to making a success here is marketing. In fact, because of the extent of marketing required, most refer to investors here as marketers, rather than real estate investors!
Overall, the concept here is to find those good deals, put those deals under contract, and then flip them to get paid.
The process of doing this is actually quite commonplace – when you know-how.
Step One: Do Your Market Research
This includes finding out where all those areas are where the investing activity is occurring, which is buying and selling. This will allow you to find that most ideal property to work with here.
The best property type is one that offers a more compelling value for the money that’s being requested like the ones that you can see at http://sandiegodowntown.com and get the most for your money. Notably, those ideal investor type properties aren’t always the ones that are publicized the most. So, you’ll need to hone your research skills here. This can include searching online adverts, classified adverts, direct mail, or even word of mouth from those in the real estate industry and reputable sources.
Step Two:Attract Those Cash Buyers
When you do locate that ideal property, you’ll need to put it under contract. This now means you’ll need to market again, but this time it’s for the property itself to cash buyers. This will usually be other investors or landlords.
To make your profit, you’ll need to mark up the property price by a few thousand. Or, if the property was contracted at a very low price, market appropriately here. However, this figure will need to account for some room for the buyer to see how they could make a profit also.
Step Three:Select That Best Cash Buyer to Complete the Process
Once you find yourself with an immediate cash offer, you’ll need to get the buyer to sign a contract with you. This will agree on the purchase price alongside an assignment contract. Then, once the closing has been handled, you will receive your cash profit for the deal.
What to Consider When Flipping Real Estate Contracts’
Though most people find flipping real estate contracts the more exciting and profitable of avenues, there are several things to bear in mind when attempting this.
Firstly, it’s crucial to ensure that several conditions are put into place, which will allow you to exit without a penalty or fine.
This can be done by way of writing in a clause that the flipper can edit the contract without losing money during the contingency phase. This is that money allocated to the earnest money deposit.
Also, it’s important to remember here that before you close the deal with a seller, you remain fully capable of assigning the contract to the new buyer. By failing to do this, you may be left on the hook and face the price dictated by the initial contract.
Finally, it goes without saying that, like all investment types, real estate contract flipping too can also present its own degree of risk.
Final Thoughts on Flipping Real Estate Contracts
In concluding, a short term strategy that allows you to get in, get out, it’s entirely possible to make $5000 to $15000 per month this way.
Flipping a piece of paper rather than actual property, this entire method requires you to offer up that best deal possible to those looking to spend their cash.
Ultimately, this method of flipping is selling the ownership of a real estate contract.
So, if you can find the right property, get the right assignment contract written up and approved, once you’ve found that right buyer, you can collect your assignment fee.
Thus, you can then move on to the next month’s real estate contract – flipping all over again for your next monthly profit!
Tarek El Moussa, the star of HGTV's Flipping 101 w/ Tarek El Moussa, launched his career as a realtor at age 21, earning big bucks selling extravagant properties in California's Orange County. When the 2007 recession caused the housing bubble to burst, he and then-wife Christina Anstead turned to 'flipping.' That is, buying houses at foreclosure auctions, fixing them up, and selling them at a profit. Their exploits served as the basis for HGTV's Flip or Flop, which quickly became one of the network's most successful series.
After the Flip or Flop stars divorced, they continued to work together on their HGTV series — even as Anstead launched her own series Christina on the Coast. El Moussa followed the same path with the February 2020 launch of his own solo show, Flipping 101 w/ Tarek El Moussa, in which he mentors first-time flippers.
'I'm sharing every lesson I've learned to help novice flippers survive their projects unscathed,' said El Moussa in the announcement for the show. 'I'm going to show them how to take the worst of the worst and make a mountain of money turning their homes into the best on the block.' There's much to learn about El Moussa's first solitary series, so you'll want to read on.
What Tarek El Moussa loves most about mentoring rookies on HGTV's Flipping 101 w/ Tarek El Moussa
Tarek El Moussa has been flipping houses for a long time, and his first solo effort for HGTV finds him lending his hard-earned expertise to newbies. HGTV's announcement for Flipping 101 w/ Tarek El Moussa promised some challenging projects in the show's debut season, including one in which the renovation costs threatened to soar so high the flip may actually lose money and another tackling a grungy dump whose previous residents were animal hoarders.
As El Moussa told USA Today, he relishes the opportunity to pass on his knowledge to those who desperately need it. 'I'm really excited about the project because it takes everything I love — investing in real estate and TV — and it's all in one format where I get a chance to really help people out who are new to flipping houses,' he explained.
One thing that surprised him while filming Flipping 101 was how many of the aspiring flippers ignored his sage wisdom. 'I'll tell them what to do, and literally half the time they don't listen to me,' he said, but admitted the rookies' self-inflicted damage 'makes for good TV.'
The surprising origins of HGTV's Flipping 101 w/ Tarek El Moussa
When Tarek El Moussa spoke with SheKnows in July 2019, he had recently finished shooting the pilot for the then-untitled series that would become HGTV's Flipping 101 w/ Tarek El Moussa. According to the HGTV star, the format of the show, in which he mentors wannabe flippers, is a natural outgrowth of the mentorship role he's embraced throughout his life.
'I love coaching,' said El Moussa. 'For me, the reason I'm successful is because I started being coached at a very young age. I'm a huge believer in having a coach, a mentor or having someone that inspires you and someone that you can follow and believe in.' Flipping 101, he explained, is the kind of show he'd always wanted to do and, when the opportunity arose, he 'jumped on it.' Added El Moussa: 'Nothing sounds more exciting than to take someone that's new to real estate and flipping and giving everything I can to help them make a profit.'
While El Moussa makes it sound easy, the stakes are high for the rookie flippers who have their own money on the line. 'There was definitely a lot of real stress going on,' he admitted.
Tarek El Moussa's new girlfriend will appear in HGTV's Flipping 101 w/ Tarek El Moussa
While Tarek El Moussa's ex-wife Christina Anstead was remarried with a new baby within three years of their 2016 split, he's been taking things more slowly. In fact, it wasn't until August 2019 that he revealed on Instagram he was dating Heather Rae Young of Selling Sunset, the Netflix reality show following a group of Los Angeles realtors.
Speaking with People, El Moussa admitted that after his divorce he had a tough time picturing himself in a relationship again. 'Physically, spiritually, mentally, I was so broken,' he admitted. 'I just never really thought I would open up to someone again. I never thought I would be vulnerable again.'
Yet he managed to find love once more — and he's bringing it to the screen. In a romantic Instagram post featuring a photo of the couple snuggling on a bed, El Moussa revealed that Young will be appearing in at least one episode of HGTV's Flipping 101 w/ Tarek El Moussa. 'For the first time ever, [Young] and I filmed my new show together,' he wrote. 'We were both excited and nervous but we had a blast!! She was so cute on camera I couldn't stop smiling!'
Tarek El Moussa was originally uncertain about the premise of HGTV's Flipping 101 w/ Tarek El Moussa
Flip or Flop follows a fairly specific format from episode to episode, as Tarek El Moussa and ex-wife Christina Anstead purchase run-down houses, redesign and renovate them, and then put the new transformations on the market. HGTV's Flipping 101 w/ Tarek El Moussa, however, shifts the format to other people's flips, with El Moussa serving in an advisory capacity. In an interview with SheKnows, El Moussa admitted that initially he wasn't convinced the concept would provide enough drama to hold viewers' attention. 'Going into this thing, I wasn't too sure about it,' he said. 'I was like, 'Is it going to be too boring?'
It was while El Moussa filmed the pilot, however, that he realized boredom wasn't going to be a problem. 'I'm telling this couple what to do and the next day I show up and they didn't listen to anything I said because they thought they knew better than me,' he marveled. 'I'm standing there like, 'Is this for real?' I was waiting for Ashton Kutcher to come out and punk me.' While he was admittedly 'flabbergasted,' he also realized 'that's what makes it a great show.'
The star of HGTV's Flipping 101 w/ Tarek El Moussa snatches up houses quickly
Tarek El Moussa has been successfully flipping houses for more than a decade through his California-based company, Tarek El Moussa & Associates. He continues to do his thing on HGTV's Flip or Flop and subsequently on Flipping 101 w/ Tarek El Moussa and remains on the constant lookout for budget-priced houses he can flip.
One of his websites, sellmyuglyhome.com, explains that the company won't be listing the home like a realtor, they're actually buying it from the homeowner. Since the company pays sellers in cash, they're 'able to close quickly.' In fact, El Moussa states that he's willing to buy houses in 'any condition' if the price is right.
The key benefit for sellers, says the site, is the speed of the transaction. Once the company receives all the required information about the property, an all-cash offer can usually be made within 24 hours. Compared to the time it can take to sell a home through a real-estate listing, this can be a motivating factor for someone looking to make a deal quickly.
Is HGTV's Flipping 101 w/ Tarek El Moussa replacing Flip or Flop?
With Tarek El Moussa busy with his own show, HGTV's Flipping 101 w/ Tarek El Moussa, and with ex-wife Christina Anstead focusing on her own show, Christina on the Coast on the same network, fans of Flip or Flopcould be excused for worrying about the fate of the former couple's original house-flipping show. However, the ongoing success of Flip or Flop guarantees the exes will continue working together on the show in addition to their various other endeavors.
While there were understandable concerns about Flip or Flop after the couple's divorce, viewership actually grew as curious viewers tuned in to witness the new dynamic of ex-spouses working together. After 21.9 million viewers watched the eighth season, in December 2019 HGTV announced it was picking the show up for a ninth.
'We're just taking it season by season,' El Moussa told the New York Post of Flip or Flop. 'Obviously the ratings are very strong and viewers like it, so why not give [the viewers] what they like? We've been doing this close to 10 years at this point — and shot well over 100 episodes — so we'll keep riding this train until nobody wants to get on it.'
The star of HGTV's Flipping 101 w/ Tarek El Moussa has some tips for flippers
Tarek El Moussa has a wealth of knowledge to impart to the rookie house-flippers he mentors on HGTV's Flipping 101 w/ Tarek El Moussa and in advance of the show's premiere he shared some of his favorite tips and tricks with CNBC. One piece of advice he highlighted is to stay on top of market conditions, with the best time to flip a house being when supply is limited and fewer homes are on the market.
El Moussa also noted the importance of evolving along with the market; as conditions change, so should a flipper's strategy. Factors such as higher construction costs, increased competition as more flippers enter the market, and homeowners taking their properties off the market while waiting for prices to rise are among the many considerations to examine.
Perhaps his most important tip is to keep an eye out for bargains. 'Flipping houses is flipping houses; there are deals in every city across this nation,' he said, explaining that a successful flip can fund further flipping: 'You can refinance that asset, you can borrow against that asset, [and with the profits] you can buy more assets.'
Are Some Money Flips Real
HGTV's Flipping 101 w/ Tarek El Moussa isn't just business
The fame that accompanied the success of Flip or Flop has been something of a double-edged sword for Tarek El Moussa. While he's certainly enjoyed the perks of celebrity, he also experienced the downside when his divorce played out under the harsh glare of the media spotlight. It's for this reason, he told SheKnows, that he believed his solo HGTV series Flipping 101 w/ Tarek El Moussa would show a side of him that viewers hadn't yet seen.
'My personal life has been opened up like nine million times, and a lot of the times it was opened up, it was negative things,' he explained. 'I was very excited to really show everyone what I'm all about, what my life's all about — the real me.'
Despite his TV fame, El Moussa insisted he's 'just kind of an everyday guy; this is just how I am ... I am an open book and I think people will get an opportunity to kind of see how I really am outside of Flip or Flop.'
The star of HGTV's Flipping 101 w/ Tarek El Moussa has a digital series
Launched in August 2019 as an online companion series to Flip or Flop, Tarek's Flip Sidegets intimate via brief episodes devoted to different themes, such as how the star of HGTV's Flipping 101 w/ Tarek El Moussa spends his free time with his children and what one of his typical days is like. The online series, noted HGTV, takes viewers 'behind the scenes with Tarek El Moussa when the Flip or Flop cameras stop rolling,' allowing the opportunity to see 'what his life is like and how he's reinventing himself today.'
Around the same time that Tarek's Flip Side debuted, El Moussa also launched his own podcast, Life by Design with Tarek El Moussa. While Tarek's Flip Side got up close and personal, the podcast was devoted to entrepreneurship and achieving success, featuring an eclectic array of guests ranging from pro skateboarder-turned-entrepreneur Mikey Taylor to Ryan Serhant, star of Bravo's Million Dollar Listing New York.
HGTV's Flipping 101 w/ Tarek El Moussa gets fiery
The process of buying and flipping houses is far from a science. As such, things can go drastically wrong in a heartbeat. That proved to be the case with one of the properties featured in the first season of HGTV's Flipping 101 w/ Tarek El Moussa when that home nearly burned to the ground while being renovated.
El Moussa made light of the house fire on Instagram, featuring a photo of himself standing in the scorched shell of the property in question. 'So what happens when your flip almost burns down,' he wrote in the caption. 'Okay lol this isn't one of my properties. This is one of the flips from my new series, Flipping 101.'
When things like that happen during a house-flipping home renovation, it can spell disaster — unless it's being captured by TV cameras for an HGTV reality series. Then, it's TV gold! Not only is that particular project chronicled in the first season of Flipping 101, HGTV even highlighted the catastrophe in its announcement for the show, capitalizing on the inherent drama of 'a property that catches fire mid-reno.'
HGTV's Flipping 101 w/ Tarek El Moussa contains a few lessons
Mentoring rookie home-flippers on HGTV's Flipping 101 w/ Tarek El Moussa brought Tarek El Moussa face-to-face with first-timers, allowing him to try to correct all the mistakes he saw them making. In an interview with SheKnows, El Moussa spotlighted the two biggest errors he's witnessed rookie flippers make: 'They pay too much for the house and they don't calculate all the costs involved on top of the construction.'
Flipping 101, he explained to the New York Post, allows him to share his knowledge as an 'expert' who shows the rookies 'why I'm making the decisions I make.'
The key message he wants to get across is that while the process of house-flipping can be fun, 'people forget that it's also a business.' He continued, saying, 'You have to count every dollar and every cent and time is everything.' According to El Moussa, each of the people he works with in Flipping 101 face their own unique challenges, but he's insistent that all of them take the house-flipping process seriously. 'One of the biggest lessons I try to teach rookie flippers is that flipping houses isn't a hobby,' he added.
The star of HGTV's Flipping 101 w/ Tarek El Moussa isn't all confidence
Tarek El Moussa's excitement and enthusiasm about the debut of Flipping 101 came through in the numerous interviews he gave promoting the show, but he also admitted to some apprehension. 'It's my business, my career. I'd be lying if I said I wasn't [nervous],' he told the New York Post. 'How could I not be? It's my first solo venture and if the world hates it then that's not a good thing.'
However, El Moussa's confidence far outweighed any 'jitters' he was experiencing, telling the Post he was 'very confident in my skills and my abilities and what I'm able to achieve on TV.'
While he expressed his satisfaction that HGTV's Flipping 101 w/ Tarek El Moussa showcases 'a much different version of me and who I am as a person and as a businessman,' at the end of the day it's all about the quality of what winds up onscreen. 'I'm very confident people will like the show,' he added, 'not because of me but because it's a really good show.'
There's a 'changed' man behind HGTV's Flipping 101 w/ Tarek El Moussa
While the success of Flip or Flop brought Tarek El Moussa a certain degree of fame, that celebrity transformed to notoriety during his high-profile split from ex-wife Christina Anstead. 'Going through a public divorce was the absolute worst thing in the world,' El Moussa told USA Today, but insisted that he'd grown to become more comfortable sharing his personal life with the world. 'Now I embrace the fact that people know all about me,' he explained.
This new philosophy was on display when, after he and new girlfriend Heather Rae Young were photographed by paparazzi, he shared that paparazzi pic on Instagram. 'Normally I like our privacy but when the paparazzi gets cute shots like this it makes me happy,' he wrote in the caption.
As El Moussa told Us Weekly (via MSN), this is an example of one of the many ways he'd grown to become a different person. 'I've absolutely changed a lot,' the star of HGTV's Flipping 101 w/ Tarek El Moussa explained. 'How I think, how I feel, my mindset, my thoughts on things. I've completely rebuilt myself and it's a very, very good feeling.'
The housing market has an effect on HGTV's Flipping 101 w/ Tarek El Moussa
Does Money Flipping Really Work
Ahead of the premiere of HGTV's Flipping 101 w/ Tarek El Moussa, Tarek El Moussa appeared on CNBC to discuss how international trade wars and increased tariffs were affecting the United States real estate market by driving up the costs of construction. This, he explained, was having a direct impact on his business, and, by extension, both of his HGTV shows. 'Just because I'm spending more money to fix up a house doesn't mean I get to sell it for more,' he explained. 'That money is coming out of my profit.'
Is Money Flipping Legit
Speaking of profit, El Moussa said he looks for a typical rate of return of between 10 and 12 percent per flip, which he tries to turn around within four months. 'If I can turn that a few times a year, that's the goal,' he said.
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El Moussa revealed his company has also been purchasing properties to rent out as he shifts his strategy to adapt to market changes. As home prices rise, he explained, 'it's created a large demand for rental housing, and therefore investors are now capitalizing in buying rental properties. So I'm a big believer in buying income-producing assets.'