A slow flip is when you buy a property, typically with specialized high leverage funding, and then immediately sell it for a considerably higher price to a tenant buyer using a contract for deed (land contract) with seller financing.
To understand the slowflip strategy, it's important to understand the concept of a contract for deed. This is a legal contract for the sale of land where the buyer acquires possession of the land and pays the purchase price in regular installments over a designated period of time. The seller retains legal title until all payments are made.
When the full purchase price, including any interest, has been paid, the seller is obligated to sign a deed to convey legal title to the property to the buyer. The buyer is typically required to make an initial down payment to the seller. This concept is otherwise known as "land contract", "installment land contract", or "land sales contract". Contract for Deed definition source: Cornell Law School Legal Information Institute
This lesser-known real estate investing strategy is attractive for a number of reasons, especially:
💰 limited capital requirement -- we fund over 100% of your purchase price, up to 100% of As Is value
🛠️ no repairs -- the buyer on your contract for deed is responsible for property maintenance
🌎 passive, low-touch, low turnover -- ideal for out of state investors
Designed in collaboration with a network of real estate investors who specialize in the slow flip strategy, our Slow Flip funding program is the perfect solution for your next slow flip. We use a common sense approach to underwriting each deal and each borrower ("client"). This loan program is a balance sheet program -- we hold your loans until maturity and we service in-house. For that reason, we have a clear sense of long-term partnership and the ability to learn and collect feedback and continuously improve your borrowing experience and investing resources. Let our actions and performance show you how obsessed we are with client experience and success.
|Max loan amount||up to 100% of As Is value ($50,000 limit)|
|Interest rate||Get Instant Quote|
|Origination fee||Get Instant Quote|
|Legal/Doc Prep fee||$500|
|Appraisal||Market price ($300 - $450)|
|Time to close||14 - 21 days|
|Slow Flip experience||0+|
|Real estate investing experience||Preferred|
|Business Entity||LLC or Corporation|
|Minimum Loan Amount||$20,000|
|Maximum Loan Amount||$50,000|
|Property Type||single family residential|
|Property Condition||C3, C4, C5, C6|
|Appraisal||As Is 1004 with 1007 Market Rent Schedule|
The reason the strategy is referred to as a slow flip, is because you are essentially selling the house over a long period of time and collecting monthly seller finance payments until your loan is paid off or the property is sold and your seller financing is paid off.
It's important to consult a real estate attorney to determine if your local or preferred market is a good fit for the slow flip strategy.
🏚️ distressed houses
💰 low home prices (up to $50,000)
⚖️ favorable and stable legal precedent for contract for deed transactions and evictions
🏙️ close to large cities with favorable long term prospects
Generally there are two personas of tenant buyers:
We have put a lot of thought into this question, and like most things in life, the appropriate answer is that it depends. We have come to the conclusion that the merits of the model outweigh the risks inherent in the model and we feel a strong sense of responsibility to know our clients and verify that they are conducting themselves in an ethical manner. These are the questions we ask ourselves:
We encourage you to share questions that you think should be added to help all parties understand and debate the ethics of this model.