Tyson Smith shows how to use Novation contracts to flip houses by offering sellers a guaranteed cash price, then reselling on the MLS for profit. You keep the difference between what you paid and the retail sale price, with no real estate license required.
Flipping houses using Novation contracts has never been easier. In the day and age of newbie wholesalers lowballing sellers and real estate agents who have no idea what they're doing, it is the perfect time to learn how to help people sell their properties using a Novation contract. A Novation contract allows us to essentially wholesale properties to retail buyers on the MLS. This gives us a huge leg up on regular wholesalers because we can offer way more money to the sellers than they can, and we can sell deals that they can't. We can offer more money because retail buyers are willing to pay a lot more than cash buyers are, and we can move deals in pretty much every single market in the United States, regardless of whether we have a buyers list there, because we get to leverage the power of the MLS. We also have a competitive advantage over realtors, because when sellers decide to work with us, the seller knows exactly how much money they're going to walk away with. They aren't tied into 6- to 12-month listing agreements with realtors who are just going to put the property up on the MLS and hope a buyer shows up. Our method also makes sure that sellers don't have to do open houses, keep their house spotless, or make any repairs to the property. It really is the best of both worlds. Sellers get the speed and convenience that wholesalers typically offer, while also getting a lot closer to top dollar that realtors promise. Now, the way we source these deals is by reaching out to owners off-market using the same method wholesalers use to find deals and that realtors use to find listings. Once we find somebody who's interested in selling their house, we give them two offers. First, we will give them our company's cash offer. As real estate investors, we are interested in buying properties to keep. However, our cash offer typically doesn't work for most sellers. Now we can use our Novation offer to get them the money they need with the convenience that comes with a cash offer. When a seller decides to move forward with our Novation offer, we have them sign our Novation paperwork that gives them a guaranteed number the house won't sell below, and the convenience of not having to deal with the hassle that comes along with listing your house on the MLS, because we take care of all that for them. At this point, we get the property listed on the market and get the house in front of all of the biggest investors in town. Once offers start rolling in, our company heavily vets each potential buyer to ensure they are serious and qualified. We only inconvenience the seller with a showing once we have a thoroughly qualified buyer ready to make an offer. Once an offer is accepted, we deal with the title company, the inspectors, the lenders, and everybody else required to get the deal closed. All of our sellers are aware that we get to keep anything above the guaranteed price we've promised them, so there are no surprises at closing when they see our fee. The great thing about this method is that it doesn't require a real estate license or experience, and can be learned by anybody willing to develop a few skills. First, you need to learn how to be an excellent communicator. You need to learn how to understand a homeowner's goals, and if it's a good fit, show them how you can help them get there. You also need to learn how to effectively price real estate. Now, people make a big deal out of this, but it's really just a little puzzle. You look around at all the properties that are listed on the market, and properties that have sold recently, and you determine what prices will cause a property to sell fast. Lastly, you need to learn some basic principles of real estate transactions. All the paperwork and everything that goes into them is really simple. Now, if this is something you'd be interested in learning more about, make sure you leave a comment with exactly what questions you have. But if you're ready to get this implemented into your current real estate business, DM me on Instagram @tyson_smith. As always, guys, thank you for watching, and I'll see you on the next one.
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