Table of Contents
Table of Contents
Flipping real estate contracts ain't just about lipstick on a house and cashing checks. When it comes to REO properties, you're dealing with a different animal altogether. These are real estate assets that banks have already repossessed, which means you’re no longer talking to emotional property owners—you’re negotiating with cold, corporate entities who want numbers, not stories.
For real estate investors trying to get their grind on, REOs can feel intimidating at first. But here's the deal: flipping contracts in this space is totally doable—if you understand how to maneuver inside the system.
This ain’t your grandma’s real estate business. We’re not just talking about painting walls and slapping it on Zillow. We’re talking about controlling real estate contracts, leveraging assignment agreements, navigating bank regulations, and still walking away with a few thousand dollars in profit—per deal.
REOs can either be a roadblock or a fast track to scaling your operation. This post is gonna break it all down for you: how to work with REOs, flip the damn thing using contract assignment or double closes, and build a business model that gets you paid whether you're dealing with a person or a bank.
REO properties—a.k.a. bank-owned assets—hit the market after foreclosure auctions flop. Now, the real estate contracts attached to these properties get funky, because you're not negotiating with some tired landlord—you’re dealing with asset managers and title companies that don’t care about your hustle.
These banks are motivated, but they play by rules. That means due diligence, paperwork, and red tape. But that’s also what makes them juicy targets for real estate investors who know how to navigate the system.
You’re not just flipping real estate—you’re mastering a niche game. And once you learn how to move within their system, flipping real estate contracts attached to REOs can become just another weapon in your arsenal.
Here’s where the rookies get smoked: contract assignment on REOs? Usually not happening. Banks love their clauses, and most of their purchase agreements come with strict anti-assignment language.
But don’t sweat it—you’ve still got options.
You can do a double-close or a simultaneous close, where you take title for a hot minute and then immediately sell to your end buyer. It’s not about skipping rules—it’s about mastering the loopholes and leveraging your negotiation skills to play the bank's game better than they do.
One of the biggest speed bumps in REO wholesaling is that non-refundable earnest money deposit. While a motivated seller might let you slide with ten bucks, banks want to see real skin in the game—like $1,000, or 10% of the purchase price.
You better be damn sure about your subject property before you lock it up. That’s why repair costs, market value, and potential ARV must be on point. And while everything is technically negotiable, banks ain’t emotional. They want clean numbers and fast closings.
Let’s keep it real: if you’re not solid on real estate contracts, you’ve got no business doing deals—especially with banks. These aren't napkin deals from a tired landlord. These are full-blown, buttoned-up real estate contracts with timelines, penalties, and zero margin for BS.
A legit purchase agreement includes your purchase price, your earnest money, and your escape hatches—called contingencies. The contract is your shield and sword. It protects you and gives you control, especially when you're planning on flipping real estate contracts to potential buyers for a spread.
Don’t half-read it. Know every line. The wrong clause can screw your deal faster than a bad comp.
This is where the magic happens. In real estate wholesaling, you get a property under contract, and then you sell that contract to an end buyer—not the house itself. You’re flipping paper, not drywall.
That means you’re selling your equitable interest through an assignment contract—which lets another investor step into your shoes, close the deal, and pay you an assignment fee—usually a few thousand dollars, sometimes five figures if you know your market.
This is flipping contracts at its finest. But remember: your contract must allow it. Not all contract terms are assignable, especially on distressed properties or bank-owned homes.
Here’s why so many investors chase this game:
Locating REO properties isn’t rocket science, but it does require grit. These aren’t your grandma’s pocket listings—you’re working with real estate agents who specialize in bank-owned foreclosures. That means getting in good with REO brokers, searching platforms like Auction.com and Hubzu, and yes—building those real estate contacts the hard way.
You’re not just trying to flip any house. You're hunting distressed properties with potential for a serious spread between purchase price and market value. Learn to identify the right property fast, because once that REO hits the MLS, every real estate investor in town is circling like a vulture.
Here’s where the sharp ones separate from the suckers.
Get boots on the ground. Walk the house. Take pics. Get real about repair costs—because underestimating those will eat your assignment fee alive.
Use a simple MAO formula: ARV × 70% – repairs – your profit = purchase price. And yeah, include your flipping contracts profit in there. Your numbers better make sense, or don’t even bother submitting.
This is due diligence, baby. You mess this up, you’re gambling—not investing.
Banks don’t play nice. They’ll ask for earnest money that’ll make new wholesalers sweat. Think $1,000 minimum, sometimes 10% of the offer. And guess what? It's often non-refundable.
This is where having access to a few thousand dollars helps you look legit.
Before you send that purchase contract, check for anti-assignment clauses. Some banks bury them deep. If the contract blocks contract assignment, you’ll need to plan for a double-close or walk.
Always submit proof of funds. Whether it’s a screenshot or a hard money pre-approval, don’t send a lowball offer with empty pockets.
Listen—banks don’t want to deal with FHA nonsense when unloading distressed properties. These REO homes are usually sold "as-is," and they’re often too busted for conventional lenders to touch. Cracked foundations, missing HVACs, mold in the basement? Yeah, good luck getting a regular bank to finance that.
This is where you pivot.
Hard money is your go-to when banks slam the door. These are short-term loans from private lenders who care more about the property value and potential profit than your W-2.
Yes, the interest is higher. Yes, the terms are tighter. But the approval is fast—and when you’re in the real estate game, speed kills.
It’s a crucial tool for flipping contracts or doing a double-close when contract assignment isn’t allowed.
Now we’re talking about the real estate investors’ secret weapon—private money from real people. Not banks. Not hard money sharks. Think: Aunt Linda with a retirement account, or a motivated seller who just cashed out and is looking to reinvest.
You’ll need market knowledge, a strong business model, and the guts to pitch your deal with confidence. Bring real numbers, your exit strategy, and show them how their money’s protected with real assets and a signed assignment agreement or sale agreement.
Master this and you’re not just playing the game—you’re scaling.
Don’t get it twisted—flipping real estate contracts might look lean on the surface, but it takes serious capital to scale. Whether you’re going after distressed properties or moving contracts fast, you still need dough for earnest money, due diligence, repair costs, and keeping your phone on to make those hustle calls.
Between title company fees, purchase contracts, assignment fees, and holding costs—this game chews up the unprepared.
Forget the gurus selling the dream of making six figures with a few thousand dollars and no plan. This ain’t that.
If you want to grow, you’ve got to stop thinking small. That means tapping into private lenders—those Ma & Pa types sitting on cash and sick of getting 0.6% in savings accounts.
You’ve got to show 'em you’ve got skin in the game and the know-how to execute. A clean assignment agreement, a solid purchase agreement, and clear terms to protect their investment. That’s how you build trust—and repeat funding.
Want multiple deals per month? Then build a real network of real estate investors hungry to fund solid plays.
Every dollar counts. You better know your market value, property value, repair costs, and what local real estate agents are flipping similar homes for.
Don't skip the walkthrough. Don't ignore local courthouse data. Don't cheap out on inspections. Every hidden issue becomes your financial pain later.
Track your purchase price, closing costs, utilities, taxes, and anything else tied to your investment property. Want to scale without blowing up your budget? You need those numbers dialed in like a sniper rifle.
If you don’t track it, you can’t scale it. Period.
You need to know how many calls it takes to lock down the right property. How many contracts fall through. What your average assignment fee is. Which real estate contracts are netting the highest ROI.
Set up a dashboard and measure every single KPI—cost per lead, average profit per deal, real estate contacts that converted, and how long it took to close.
Don’t guess. Don’t go off vibes. Build your systems. Track your margins. Make data-driven decisions like the badass real estate investor you’re becoming.
When flipping real estate contracts, your end buyer is your payday. These are often real estate investors—folks who have the cash, lines of credit, or hard money loans to move quickly. Focus your marketing on cash-ready property owners and active buyers in your local real estate market.
Avoid the spray-and-pray method. The top 5% of your list should hear from you directly—text or call. The rest can get the email blast. A good end buyer can make or break a deal, especially when you’re scaling your business model around selling real estate contracts consistently.
After locking down the right property, you move into the "sell" side of flipping real estate contracts. This is where strong negotiation skills matter. You’re not just selling a home—you’re transferring a paper asset backed by an opportunity.
This structure lets you minimize your upfront investment while staying legally covered. Contract flipping requires tight paperwork and clear boundaries—especially when the assignment fee is juicy.
Banks don’t like surprises—especially when flipping real estate contracts. That’s why many wholesalers use a double close (or simultaneous close) to smooth out the process.
That price difference? That’s your assignment fee, and it’s what makes this whole real estate business model click. Whether you're working REOs or distressed properties, closing smooth is how you stay in the game.
When you're flipping real estate contracts, speed matters. You want the deal locked and gone before anyone gets cold feet—or worse, before the deal dies in escrow. Whether you're working with REOs or distressed properties, your exit plan should be as solid as your entry.
You’re not just selling a house—you’re marketing a real estate contract that unlocks value. That means top-tier photos, a property description that hits hard, and a pitch tailored for motivated sellers and potential buyers alike.
This kind of marketing sharpens your reputation and makes flipping real estate contracts more efficient over time.
Forget greed. The local market dictates your numbers, not your fantasy flip calculator.
Keep your purchase price competitive while preserving a strong assignment fee. That balance is where pros thrive.
Want to stand out? Stack some sugar on the deal:
Great contract flipping is about removing friction. Make it easy for your buyer to say yes and fast-track the closing.
Flipping real estate contracts—especially when dealing with REOs—isn't for the faint of heart. One wrong move can wipe out your assignment fee, leave you holding a bad real estate contract, or worse—kill your reputation. Here are the rookie mistakes that’ll eat your deals alive if you’re not careful.
Due diligence is your lifeline when flipping contracts. Skip it, and you’ll get burned.
Bad due diligence leads to overpaying and under-delivering. And that kills deals.
A sloppy grip on money will put your contract flipping real estate business in a ditch.
Smart operators keep a tight leash on cash flow and never let one deal ruin their month.
Real estate investors who succeed with REOs don’t just hustle—they execute with precision.
This game rewards execution, not ego. You’re not here to be busy—you’re here to close.
Not everyone’s cut out for flipping real estate contracts—especially when REOs are involved. You’ve got to be built for chaos, wired for negotiation, and ready to drop cash like a pro. Let’s break it down so you know if this is your game or someone else’s nightmare.
Flipping contracts—especially in the REO world—ain’t passive.
If you’re low on time and cash, consider wholesaling real estate with motivated homeowners first before jumping into bank-owned madness.
This isn’t HGTV—it’s the real estate market, and it doesn’t care about your feelings.
Risk tolerance separates hobbyists from real estate investors who treat this like a business.
Let’s be real: The highs are high—and the lows can suck.
The juice is worth the squeeze—but only if you’re playing the game with your eyes open.
You might be a one-person show right now, but if you want to scale flipping real estate contracts—especially when dealing with REOs—you better start assembling your Avengers. A sharp team isn’t optional; it’s mission-critical for anyone serious about dominating the real estate business.
You’re not expected to know it all—but you are expected to connect with the people who do.
Your core squad should include:
Having the right people in your corner can make or break your ability to scale flipping real estate contracts efficiently.
Here’s the cold truth: one bad contract can wipe out your profits—or worse, land you in hot water.
In this game, the pros don’t go it alone—they build a team. And if you’re flipping REOs or selling real estate contracts regularly, you’ll need that bench to be deep, loyal, and razor sharp.
Let’s get one thing straight: if you’ve made it this far, you’re not a hobbyist. You’re serious about flipping real estate contracts and building a real, scalable, no-BS real estate business.
But success doesn’t come from hustle alone—it’s forged in the fire of mastery. That means knowing your way around real estate contracts, understanding your assignment agreements, mastering contract assignment methods, and building an unstoppable business model that thrives in any real estate market.
Here’s what separates the wannabes from the heavy hitters:
When it comes to flipping real estate contracts, there’s no room for guessing. You either know what you’re doing—or you’re learning fast. Because in this game, speed, clarity, and precision matter.
So what’s next? You get out there, you apply the blueprint, and you flip like a damn professional. Whether you're deep in the REO trenches or carving out deals in your local real estate market, you've got the tools to move with confidence.
This isn’t just about making a few thousand dollars on a deal. This is about building wealth, creating freedom, and becoming the bad ass real estate investor you were meant to be.
Dear Tracy,
Thank you so much for the quick response to my questions...I almost fell out of my chair when you called my name and state...lol. Out of all the informationals I have brought in the past...NO ONE has been willing to give me FREE information before.
God Bless You
Van
Very helpful Tracy....thanx for the free info..
Just seen your mob talk, didn’t understand a darn thing yet, but it was interesting,..
I can’t pay my property taxes this year going through a separation/divorce, the other party is not helping, should I put down as much as I can on the property taxes? I did get an extension to the end of May, and I do not know what happens if I can’t pay them, can you tell me what happens please to my home?
After 2 years, you could lose your home to the tax deed sale. If you would like an investor to make an offer on it, please contact us at (904)242-6629