Flipping Real Estate Contracts: How to Get a Foot in the Door in Real Estate

27 May 2025

If you're looking to break into real estate without a hefty investment, flipping real estate contracts might be your golden ticket. This strategy allows you to profit from property deals without ever owning a single house. Sounds too good to be true? Well, it's not—if you know how to do it right.

In this guide, we'll walk through what flipping real estate contracts is, how it works, and the exact steps you need to take to get started. Ready? Let's dive in.

What Is Flipping Real Estate Contracts?

Flipping real estate contracts, also known as wholesaling real estate, is a strategy where you secure a property under contract and then sell that contract to another buyer for a profit. The kicker? You never actually purchase the property yourself.

Instead, you act as the middleman, connecting a motivated seller with a real estate investor who is willing to buy the property.

How Does It Work?

1. Find A Distressed Property or Motivated Seller – Look for homeowners who are eager to sell quickly due to financial difficulty, foreclosure, or other personal reasons.
2. Negotiate a Purchase Contract – Once you find a property, negotiate a price with the seller and get the property under contract.
3. Assign the Contract to an Investor – Instead of buying the property, you sell your contract to an investor at a higher price.
4. Collect Your Assignment Fee – The difference between your contracted price and what the investor pays is your profit.

Let’s say you negotiate a deal to buy a house for $100,000. You then sell your contract to an investor for $110,000. The investor buys the property for $110,000, and you walk away with a $10,000 profit—without spending a dime on the property itself!

Why Flipping Real Estate Contracts Makes Sense

So, why should you consider contract flipping over other real estate investment strategies? Here are a few reasons:

1. Low Barrier to Entry

Unlike traditional real estate investing, you don’t need a loan, a large down payment, or a high credit score. All you need is the know-how, determination, and a small amount for earnest money deposits (sometimes as little as $100).

2. Quick Turnaround Time

Unlike buying and holding real estate, wholesaling is fast. Deals can close in days or weeks, meaning you can see profits quicker compared to rental properties or fix-and-flips.

3. No Risk of Owning Property

Since you're not buying the house, you don’t have to worry about unexpected repairs, vacancies, or tenant problems.

4. Great Introduction to Real Estate Investing

This strategy helps beginners learn the ropes of real estate transactions, market analysis, and negotiations—all without taking on major financial risks.

Step-by-Step Guide to Flipping Real Estate Contracts

Now that you understand the basics, let’s break down how you can get started with wholesaling step-by-step.

Step 1: Educate Yourself on Local Real Estate Laws

Before jumping in, check the real estate laws in your state. Some states require wholesalers to have a real estate license. Others allow wholesaling without restriction.

Step 2: Find Motivated Sellers

The key to a successful deal is finding sellers who need to sell quickly. Here’s where you can find them:

- Foreclosures & Pre-foreclosures – Homeowners facing foreclosure may want to sell fast.
- Probate Properties – Inherited homes that heirs don’t want can be great opportunities.
- Tired Landlords – Owners dealing with problematic tenants may be eager to exit.
- Distressed Properties – Homes with significant repairs that owners can’t afford.

Ways to Find Sellers

- Driving for Dollars – Drive around neighborhoods looking for vacant or run-down properties.
- Direct Mail Marketing – Send letters or postcards to property owners.
- Cold Calling – Reach out directly to homeowners.
- Online Marketing – Use social media or create targeted ads.

Step 3: Analyze the Deal

Before locking in a contract, make sure it’s a deal an investor would actually want. A great rule of thumb is the 70% rule:

> Real estate investors typically won’t pay more than 70% of a property’s After Repair Value (ARV) minus repair costs.

For example, if a home’s ARV is $200,000 and repairs cost $40,000, then an investor would likely pay no more than $100,000 for it:
> $200,000 × 70% - $40,000 = $100,000

So, if you can lock in the contract for less than $100,000, you have room to sell the contract for a profit.

Step 4: Secure the Property Under Contract

Once you’ve found a solid deal, you’ll sign a Purchase and Sale Agreement with the seller. This gives you the legal right to buy the property (or assign the contract to someone else).

Always include an assignment clause, allowing you to transfer the contract to another buyer.

Step 5: Find a Cash Buyer

Now that you have the contract, your next step is finding an investor willing to buy it. Here’s how:

- Join Real Estate Investment Groups – Connect with investors at local meetups or Facebook groups.
- Use Cash Buyer Lists – Many wholesalers build and maintain lists of cash buyers.
- Attend Local Auctions – Investors at foreclosure auctions are often looking for deals.
- Leverage Social Media & Craigslist – Post your deal online with property details.

Step 6: Assign the Contract

Once you find a buyer, you’ll sign an Assignment Agreement, transferring your right to buy the property to them. They will then proceed with closing the deal.

Step 7: Get Paid

At closing, the investor pays for the property, and you collect your assignment fee—which could range anywhere from a few thousand dollars to $50,000+ per deal, depending on the price difference.

Common Challenges & How to Overcome Them

1. Finding Motivated Sellers

If leads are slow, double down on marketing efforts—consider online ads, bandit signs, and networking with realtors.

2. Legal Issues

Make sure your contracts are legally binding and that wholesaling is permitted in your area. Consulting a real estate attorney is a smart move.

3. Struggling to Find Buyers

Build a strong cash buyers list before locking in contracts. Having a network of ready buyers makes closing deals easier.

4. Getting Contracts Right

If you're unsure about the paperwork, work with a real estate attorney or mentor to ensure everything is legally sound.

Final Thoughts

Flipping real estate contracts is one of the fastest and easiest ways to break into real estate—without needing hundreds of thousands of dollars or taking on risky loans. If you’re willing to put in the effort to find deals and connect with investors, it can be a highly profitable venture.

Want to get started? Start researching your local market, networking with investors, and finding your first motivated seller. Who knows? Your next deal could be just around the corner!