Novations are DEAD - This New Strategy Will Change Everything
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Speaker 5
This deal is a dead deal to every single other real estate investor out there. There is no novation, right? They just bought this six months ago.
There's no higher list price you can give.
Speaker 5
There's no wholesale opportunity. There's no sub two because the debt is at 6.75.
The mortgage payment is more than what rents would go for in the area.
Speaker 5 There's no deal unless you are doing reverse flipping.
Speaker 5
What is up, my science of flipping family? I am back with a solo episode. That is right.
No guest on this episode. It is just yours, truly.
Speaker 5 And I'm going to be giving you what I believe to be the hottest information you can ever imagine.
Speaker 5 If you have been in this space of real estate over the last year or so, you know that one of the hottest subject matters, the newest strategy, the thing that's catching everyone's attention is novations.
Speaker 5
Well, I'm here to tell you guys, novations is dead. Novations are obsolete.
Now, if you are doing novations, you know I'm being a little extreme right now. I'm being just a tad bit extreme, guys.
Speaker 5 But the reality is this.
Speaker 5 There's a strategy that we are currently using, me and my team and our JVs are using right now that in the last 30 days, we have done 130 deeds.
Speaker 5 That means we have purchased 130 homes in the last 30 days.
Speaker 5 How?
Speaker 5 We call it reverse flipping. Now, let me describe to you the difference and why this model is going to make so much sense going into 2024 and 2025.
Speaker 5 Literally, this model is going to last forever, but over the next 24 months, for sure, we're going to have a lot of pain in the streets. Now, let me stop for a second.
Speaker 5 For those of you who are brand new, some of these concepts may be a little bit more advanced, but bear with me. I'm going to try to keep this as simple as possible.
Speaker 5 For those of you that are active investors, then you know exactly what I'm talking about about innovations. And let me teach you what reverse flipping is.
Speaker 5 But to start for the newbie, an ovation tends to give investors an ability to come in with a higher offer. And the, the, you know, easiest way to say that or the
Speaker 5 30,000-foot view without going in-depth on annovation is the ability to kind of sell a wholesale property on the MLS.
Speaker 5 You're getting an agreement, an attorney, in fact, with the homeowner that allows you to put it on the market.
Speaker 5 You get a power of attorney or a power of attorney as well, but you can put it on the MLS and essentially wholesale that property at a higher dollar amount on the MLS. That is the simplicity of it.
Speaker 5 So what does that do for the traditional wholesaler? It allows you to offer more. It also gives more of the money back to the seller.
Speaker 5 So it's a stronger negotiation tactic, but not all deals fit innovation.
Speaker 5
Let's use the example or the question. What if you have a homeowner? that is overleveraged.
What if you have a homeowner that is behind on their mortgage by $30,000 or $40,000?
Speaker 5 What if you have a homeowner that has a tax lien of $10,000, $15,000, $20,000, $30,000, $40,000, $50,000?
Speaker 5 Those examples exist today,
Speaker 5
right now. Now, as I'm recording this, we're about to go into an election week.
Literally next week, we are going to find out who the president will be.
Speaker 5 But with all that said, the next 12 to 24 months, we are going to have hardship in the economy regardless of who gets elected.
Speaker 5 And why that's that's important is because what I'm bringing to you on this episode is this concept of reverse flipping.
Speaker 5
So, if you want to learn more about science of reverse flipping, just go to scienceofreverse flipping.com. You can learn more.
We're actually doing a lot of trainings.
Speaker 5 We have over 400 people in our community right now that are crushing it.
Speaker 5 That's actually why and how we're getting so many deeds because we can show people how to go get these deeds within the first week of being in business. Now, I'll get to that here shortly.
Speaker 5
So, back to the economy. We are going to have some pain.
We are going to have people lose their jobs. Now, statistically, these are true statistics.
Speaker 5 Roughly 65% of the people that lose their jobs choose to go some sort of bankruptcy. Sometimes it's not by choice, but they choose some sort of
Speaker 5 bankruptcy, 65%.
Speaker 5 From there,
Speaker 5 most people try to go bankrupt so they can keep their home. But the unfortunate statistic is 95% of those people who go bankrupt, they also lose their home.
Speaker 5 So the challenge that we have seen in the real estate investing community for a long time is what happens when someone has no equity.
Speaker 5 It doesn't matter if you're a wholesaler, fix and flipper, no Vader, it doesn't matter. Sub 2, it's not going to matter because you're really against a no equity deal.
Speaker 5 But if you do understand what I understand about reverse flipping, you can actually make a deal that would be a dead deal.
Speaker 5
Now, for you active investors that have a CRM, these leads are already in your database. They're already in your CRM.
You've probably debted them, right?
Speaker 5 If you're watching this on YouTube, you've debted them with
Speaker 5 funny ears, right? You can't find a way to get the deal done because the homeowner is behind on their mortgage by $40,000 or $50,000, which leaves no more equity. There's a tax lien.
Speaker 5 There's an HOA lien, whatever the case may be, and it's likely going to go to foreclosure.
Speaker 5 Now, a lot of people haven't seen or experienced foreclosure over the last decade of doing business because the economy has been doing so well.
Speaker 5 However, in the last 12 to 18 months, you have seen a big change in the economy, inflation, unemployment, et cetera.
Speaker 5
So moving forward, there's this massive opportunity to go find homeowners and offer a massive amount of value. to those homeowners.
The way we get paid is by offering value to the homeowner.
Speaker 5 And if we can stop the foreclosure process and help them get out from under that weight of the home, we are going to have a nice payday.
Speaker 5 But it all starts with being able to offer value to the homeowner by stopping the foreclosure process. If you're like me in the real estate game, you know how wild things can get.
Speaker 5
Managing leads, marketing, sales, operation, it's a constant hustle. But let me tell you about something that has been a game changer for thousands of investors out there.
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Speaker 5 You've got absolutely everything you'll need from list stacking, driving for dollars, automated drip campaigns, a cold calling dialer, a full phone system, email management, speed to lead, buyer management, automated task systems, accounting features, literally the whole 90Rs.
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Speaker 5 The reason why I'm saying Novations is dead, again, being a little extreme, they're not dead, but there's a better route, is because in the cases that these homeowners don't have any equity, that they are behind, Novations don't do you any good.
Speaker 5 wholesaling doesn't do you any good sub two won't do you any good because you're really not being able to work with the bank in reverse flipping right that's where science of reverse flipping.com can help you guys
Speaker 5 you actually have a loss mitigation team that we can work with the bank to negotiate a deal for the seller that creates an opportunity as us investors now we can go buy that asset Before, we didn't have that.
Speaker 5 Now let me speak to the realtors listening. There are realtors out there that call themselves short sales specialists.
Speaker 5
Well, right now, statistically, we are seeing roughly 65% of short sales on the MLS with short sales specialist realtors are not getting approved. Not getting approved.
Now, why is that?
Speaker 5 Well, we see most often that it is because the proper paperwork is not being done.
Speaker 5 And what we have been able to do is we ended up buying a company and that company is a loss mitigation company. That company is headed by two individuals who just spent the last eight years
Speaker 5 writing the Fannie Mae HUD guidelines on short sales, short sale approvals and foreclosures. They wrote the laws.
Speaker 5 So why are we more special than anything else out there is because we can actually work with the bank in a way that no one else can because we have our business partners actually wrote the laws to do it.
Speaker 5 Now, what is a reverse flip? What does the name mean? What's the structure? Why is it different than anything else? Let me tell you a little bit more about that.
Speaker 5
Reverse flipping is exactly that. We're doing the flipping part in reverse.
What does that mean?
Speaker 5 Well, before we care about whether this is going to be a fix and flip, a buy and hold, a wholesale, a sub-to, before we care about the exit strategy, we first own the asset.
Speaker 5
We actually get the deed. We are buying the deed from the homeowner.
Now, while this isn't brand new, this is not something no one has ever heard of, it's actually been around for quite some time.
Speaker 5 That allows us to get a power of attorney and
Speaker 5 negotiate on behalf of the homeowner. And we can negotiate a price that could potentially, potentially, it's not 100% certain, create an opportunity for us to buy that property.
Speaker 5 Now, what we need essentially is the deed, quick claim deed, power of attorney, assignment of surplus. Now, what is an assignment of surplus? Now, this is where it gets really good.
Speaker 5
I had a conversation with a guy yesterday. He's doing seven to 10 of these a month.
An assignment of surplus is when it does go to auction and it sells for more than what the bank is owed.
Speaker 5
That it means there is a surplus there. Well, that surplus should be given to the deed owner because we have the deed or the estate owner.
Because we have the deed, we are the deed owner.
Speaker 5
We are the estate owner. That surplus comes to us.
There are banks that are unwilling to move or negotiate it happens that's why i'm saying
Speaker 5 we don't have a thousand percent batting average on these we have a very good batting average but even when it goes to auction and sells for over we have an opportunity to create a deal now even more on top of that there's insurance stuff that can go down so for you floridians who are dealing with the hurricane stuff you can actually have insurance payout if you're doing this reverse flipping because it starts with owning the deed.
Speaker 5
Then it goes into what we can do. What is the best potential of the property? Let me give you an example.
What me and my team just underwrote this morning.
Speaker 5
There is a two-acre piece of land that has a single family home on it in Reading, California. Our community member, we do JV deals with all of our members.
Every deal is a JV deal.
Speaker 5 So if you're just getting started and you want the fastest way to go get your deal, it is reverse reverse flipping, hands down for sure. We're doing 130 of these a month, okay, with our JV partners.
Speaker 5 So
Speaker 5
two acres, a little over two acres in Reading, California. Me and my team underwrote the deed.
The JV partner went and got the deed, got the power of attorney. We are locked and loaded.
Speaker 5 Well, there is a single family home sitting on that property. And what the seller owes on that property is such a high level of debt relative to what the home is worth.
Speaker 5 They literally bought the home six months ago. They literally just bought it.
Speaker 5
They have never paid a mortgage payment. So now they are behind on all their mortgage payments.
I don't know why people do this, but it is something that happens.
Speaker 5 So there's no real value to be negotiated. This home just sold six months ago, right? We're not going to get some crazy deep discount.
Speaker 5
But then you got to take a look at what is the potential of the property. This is why it's called reverse reverse flipping.
You own the deed first, then you figure out the property's potential.
Speaker 5 So we said, okay, well, we like California because price point, high price point.
Speaker 5 Is there anything there? So we actually just brought it up on our comping, REI LeadMachine.com. Reiled machine.com is what we call properties at.
Speaker 5 And we actually noticed in the maps that there was a couple new developments like blocks away, like up the street into the left.
Speaker 5 Brand new development of about 10 homes and a development in the making. Literally, it's been
Speaker 5
all the infrastructure is there. They're probably ready to go vertical on the development, meaning the making.
So that's roughly 20 brand new homes that were built in the last 12 months, right?
Speaker 5 Well, now we get the opportunity to say, hey, we have two acres here. Could we go create
Speaker 5 somewhere between six to ten homes on those two acres? Could this become a play where we actually own the land and we do a development play on there?
Speaker 5 And let's just say we do, you know, six homes and we can make a $100,000 spread once we sell those six homes. That's a $600,000 profit scenario for us if we do this right.
Speaker 5 The other play we could do is potentially wholesale it to the developer who's already doing this. Now,
Speaker 5 you might ask yourself, well, why wouldn't that developer go ahead and go around the neighborhood and make offers on all the properties so they could have bought out all the areas?
Speaker 5
Because it's literally, if you think about what a block looks like, the two new development areas are on the north side of the block. Our property is on the southeast side.
It's the same block, right?
Speaker 5
Well, guess what developers aren't specialists in? Going and finding these opportunities. They probably saw this as something that sold one year ago.
The debt is really high.
Speaker 5 They probably couldn't figure out the land value.
Speaker 5 so they just they or they just didn't know about it right and so we did and so could we just call this developer and say hey we have an opportunity for you we are going to actually sell you this two-acre lot at
Speaker 5 name the name i think we have like they bought this property for give or take four hundred thousand
Speaker 5 so would this developer potentially want to buy two acres for 500,000 as an example. We would make a $100,000 assignment fee essentially from this developer.
Speaker 5 They could take it the rest of the distance. They could go.
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Speaker 5 Subdivided and developed the lots. That is an easier play.
Speaker 5 I say all that to say
Speaker 5
this deal is a dead deal to every single other real estate investor out there. There is no novation, right? They just bought this six months ago.
There's no higher list price you can give.
Speaker 5 There's no wholesale opportunity. There's no sub-two because the debt is at 6.75.
Speaker 5 The mortgage payment is more than what rents would go for in the area.
Speaker 5 There's no deal unless you are doing reverse flipping. I'll give you another great example
Speaker 5
of a deal that just got done that the homeowner has overleveraged, over leveraged their home by over $200,000. The home's as-is value is give or take $700,000 if it was livable.
Okay.
Speaker 5 As is means for for mica countertops, you know, funny colored
Speaker 5
tile, right? Oak cabinets, but it's livable. It's a livable home, just not ARV.
It's not after repair value. It's as is value.
So the as-is value is $700,000. These individuals,
Speaker 5 I don't know why they do this, but they leverage themselves to $900,000 of bank loans on this property. They stop paying their mortgages.
Speaker 5 So the bank is owed $900,000 on a property that is worth right now $700,000.
Speaker 5
To make matters worse, the home's condition isn't worth $700,000. It's actually going to be worth closer to $500,000.
The home is in terrible condition. Okay.
Speaker 5 So our loss mitigating group, by the way, last factor to be aware of, if we did remodel this home, the value would be $1.3 million.
Speaker 5
So the bank is owed $900,000. The value is $700,000.
The real conditional value, meaning the condition of the home, brings it closer to $500,000, right? So we make an argument to the bank because
Speaker 5 we own the deed and our loss mit company is negotiating with the bank that the value is a lot closer to $450,000.
Speaker 5 Well, the bank doesn't want this asset.
Speaker 5
The bank approves a $440,000 payoff. That same bank is owed $900,000 on this property.
The ARV is $1.3 million.
Speaker 5 Everyone in this listening to this or watching this on YouTube, go ahead and watch this on YouTube.
Speaker 5 You would not have created a deal unless you knew how to do what we're talking about with the reverse flip. There would be no equity because the condition of the home and what the bank is owed.
Speaker 5 You would have no play as a wholesale. You'd have no play as a
Speaker 5
fix and flip or a buy and hold. You would have to negotiate with the bank.
And that is the secret sauce is our company, our loss mitigating company, will negotiate these deals for you.
Speaker 5 So if you're an active investor today, go to science of flipping, scienceofreverse flipping.com, check it out, and be a part of our community. Now, our community, guys, is $297 a month.
Speaker 5 It is extremely affordable, but it gets you to JV partner with us.
Speaker 5 We will actually do all the heavy lifting. All you have to do is go get the deed and the power of attorney and the assignment of surplus.
Speaker 5 You go get those those, and you guys are going to be able to do deals that no one else in the nation is going to be able to go do.
Speaker 5 Now, there's more to it, and I don't want to go into every single opportunity, but probate deals that you can't find the heirs, tax liens where the government's going to come in and foreclose, even though they have no bank liens, they're still going to get foreclosed on.
Speaker 5 Senior HOA, senior states, meaning the
Speaker 5
state has the HOA in certain states has the senior lien above taxes and above banks. And the HOA can foreclose.
We can work with all of these. Some states have some nuance, right?
Speaker 5
New Mexico has some nuance. North Carolina has some nuance.
Ohio has some nuance. But all of these we can actually work with.
Probate, inherited,
Speaker 5 divorce. I mean, the ugly and the hairier, the better.
Speaker 5 So if you have a bunch of leads that are ugly and hairy and you don't know what to do with, you need to start using this model calling reverse flipping. If you're brand new,
Speaker 5
let me talk to you for a second. I have been coaching for 11 years, wholesaling, fix and flipping, sub to.
I've done 3,000 deals and more.
Speaker 5 If you are brand new, this is by far the fastest way to go get a deal is to do reverse flipping. You go get a deed in a power of attorney.
Speaker 5 You don't need some algebraic equation that is going to break your mind doing 70% of ARV minus a rehab budget, minus a wholesale fee. You don't have to do that.
Speaker 5
You literally just have to understand what is the ARV of this. Let me go look on REI LeadMachine.com.
Let me go look what is the actual ARV after repair value. Then let me go look.
Speaker 5 What is the actual as-is values? Homes that have not been remodeled. What are they selling for? What are they trading for?
Speaker 5 Is there a delta big enough to go get the deed and create an opportunity where no one else sees it? That is the key. Over leverage in debt is huge, but it's not the only way to get this done, right?
Speaker 5
They may just have a probate scenario that the heirs don't want anything to do with this. There's a tax issue, et cetera.
We can work with the hairiest of all hairy deals.
Speaker 5
So when I started this thing, I said novations are dead. They're not dead, but they're not always going to be useful.
That is just the newest cool thing.
Speaker 5
Well, now I'm replacing the newest cool thing with... reverse flipping.
And if you guys want to learn how to do it, be a part of our community for just a measly $297 a a month.
Speaker 5
You will get us to underwrite for you. You will get our loss mitigation team.
You will get us to JV to deals with you. You have five coaching calls a week.
Speaker 5 It is the newest, the best thing to go get deals, and it can go in any state, any city, anywhere. We're currently in 17 different states.
Speaker 5
We're bringing in, we're buying roughly seven to 12 deeds each and every day. And we want you to partner with us.
So go to scienceofreverseflipping.com. Join the community.
Speaker 5
It is the best thing you will do for your real estate career ever. All right, y'all.
That is what I have on this episode. Hopefully, that changed your frame.
Hopefully, kind of
Speaker 5 made you think a lot about what you have and what you can be doing.
Speaker 5
If you like this, make sure you share this with at least two friends. I'd greatly appreciate that.
I love you guys. Stay tuned to the next episode.
We have an incredible guest coming. Peace.
Speaker 4
JP Morgan Payments helps you drive efficiency with automated payments and intelligent algorithms across 200 countries and territories. That's automation-driven finance.
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JP Morgan, Internal Data 2024, Copyright 2025, JP Morgan Chase Company, All Rights Reserve, JP Morgan Chase Bank, and a member FDIC. Deposits held in non-U.S.
branches are not FDIC insured.
Speaker 2
Non-deposit products are not FDIC insured. This is not a legal commitment for credit or services.
Availability varies. Eligibility determined by JPMorgan Chase.
Speaker 2 Visit jpmorgan.com/slash payments disclosure for details.
Speaker 8 There are millions of podcasts out there, and you've chosen this one. Whether Whether you're a regular or just here on a whim, it's what you have chosen to listen to.
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