Podcast Summary: "Novations are DEAD - This New Strategy Will Change Everything"

Podcast Information

• Title: The Science of Flipping
• Host/Author: Justin Colby, Bleav
• Episode: Novations are DEAD - This New Strategy Will Change Everything
• Release Date: November 1, 2024

Introduction

In the November 1, 2024 episode of The Science of Flipping, host Justin Colby delivers a compelling solo episode titled "Novations are DEAD - This New Strategy Will Change Everything." Justin challenges the prevailing wisdom in real estate investing, particularly focusing on the effectiveness of novations in current market conditions. He introduces and advocates for a groundbreaking strategy known as reverse flipping, positioning it as a superior alternative in the evolving real estate landscape.

The Decline of Novations

Justin begins by asserting that novations—a strategy once hailed as a powerful tool for real estate investors—are now obsolete. He emphasizes that novations are no longer viable in the current economic climate, especially when dealing with properties where homeowners are significantly over-leveraged.

Justin Colby [00:42]: "Novations are dead. Novations are obsolete."

He explains that novations previously allowed investors to enter deals with higher offers by wholesaling properties on the MLS, providing more value back to sellers and strengthening negotiation tactics. However, Justin points out that not all deals fit the novation model, especially those involving homeowners deeply in debt or facing foreclosure.

Justin Colby [02:30]: "There is no novation, right? They just bought this six months ago. There's no higher list price you can give."

Introduction to Reverse Flipping

Justin introduces reverse flipping as the innovative strategy that is reshaping real estate investing. Unlike traditional flipping, reverse flipping prioritizes owning the deed and evaluating the property's potential before deciding on an exit strategy.

Justin Colby [03:15]: "Reverse flipping is exactly how we're doing the flipping part in reverse. Before we care about the exit strategy, we first own the asset, we actually get the deed."

He shares that his team and joint venture partners have successfully purchased 130 homes in the last 30 days using this method, highlighting its effectiveness and scalability.

Justin Colby [03:40]: "We have purchased 130 homes in the last 30 days. How? Through reverse flipping."

Advantages of Reverse Flipping

Justin outlines several key advantages of reverse flipping:

1. Mitigating Foreclosure Risks: By owning the deed, investors can negotiate directly with banks to prevent foreclosures, providing value to homeowners while securing profitable deals.

   Justin Colby [05:00]: "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."

2. Handling Complex Deals: Reverse flipping is particularly effective for "ugly and hairy" deals that traditional methods like wholesaling or fix-and-flip cannot resolve due to lack of equity or excessive debt.

   Justin Colby [14:50]: "You have to negotiate with the bank. And that is the secret sauce."

3. Long-Term Sustainability: Justin predicts that reverse flipping will remain a viable strategy indefinitely, especially as economic hardships persist.

   Justin Colby [04:10]: "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."

Practical Examples and Success Stories

Justin shares real-world examples to illustrate the effectiveness of reverse flipping. One notable case involves a property in Reading, California, where his team secured the deed of a single-family home situated on two acres of land. Despite the homeowner being over-leveraged and behind on mortgage payments, Justin's team identified the property's potential for development due to nearby new constructions.

Justin Colby [07:40]: "We noticed in the maps that there was a couple new developments, and we saw an opportunity to develop this two-acre lot into multiple homes, potentially generating significant profits."

Another example involves negotiating a payoff with a bank for an over-leveraged property, demonstrating how reverse flipping can turn a seemingly dead deal into a profitable investment.

Justin Colby [12:15]: "If we own the deed and our loss mitigation company is negotiating with the bank, we can create opportunities where no one else sees it."

Tools and Resources: Resimpli

To support investors in implementing reverse flipping, Justin introduces Resimpli, an all-in-one software platform designed to streamline real estate investing operations. Resimpli offers a suite of tools, including:

• List Stacking and Driving for Dollars
• Automated Drip Campaigns
• Cold Calling Dialer and Full Phone System
• Email Management and Buyer Management
• Automated Task Systems and Accounting Features

Justin Colby [06:10]: "Re simpli is an all-in-one software that truly is a lifesaver for anyone serious about the real estate investing game."

He highlights the efficiency and comprehensiveness of Resimpli, making it an indispensable tool for investors looking to scale their businesses without juggling multiple subscriptions.

Community and Support

Justin emphasizes the importance of community and support in mastering reverse flipping. He invites listeners to join the Science of Reverse Flipping community, which offers:

• Joint Ventures and Deal Opportunities: Partnering with seasoned investors for mutual success.
• Coaching Calls: Five coaching sessions per week to provide ongoing education and support.
• Access to Loss Mitigation Experts: Negotiating deals directly with banks to secure favorable terms.

Justin Colby [15:30]: "Join the community for just $297 a month, and you'll get us to underwrite for you, our loss mitigation team, and access to exclusive deals."

Conclusion and Call to Action

In closing, Justin reiterates the superiority of reverse flipping over traditional strategies like novations, especially in the face of economic uncertainty and increased foreclosure rates. He urges investors to adopt this new model to stay ahead in the competitive real estate market.

Justin Colby [24:10]: "Reverse flipping is the best thing you will do for your real estate career ever."

He encourages listeners to visit scienceofreverseflipping.com to join the community and start leveraging reverse flipping to transform their real estate investing businesses.

Justin Colby [24:30]: "Go to scienceofreverseflipping.com. Join the community. It is the best thing you will do for your real estate career ever."

Notable Quotes

• Justin Colby [00:42]: "Novations are dead. Novations are obsolete."
• Justin Colby [03:15]: "Reverse flipping is exactly how we're doing the flipping part in reverse."
• Justin Colby [05:00]: "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."
• Justin Colby [14:50]: "You have to negotiate with the bank. And that is the secret sauce."
• Justin Colby [24:10]: "Reverse flipping is the best thing you will do for your real estate career ever."

Final Thoughts

This episode of The Science of Flipping serves as a transformative guide for real estate investors seeking innovative strategies to navigate a challenging market. Justin Colby's introduction of reverse flipping offers a promising pathway to success, emphasizing adaptability, strategic negotiation, and the importance of leveraging the right tools and community support. For investors eager to elevate their game and achieve millionaire status, adopting reverse flipping could be the key to unlocking unparalleled opportunities.

Connect with Justin Colby and The Science of Flipping:

• Website: scienceofreverseflipping.com
• Join the Community: Access joint ventures, coaching calls, and expert support for $297/month.

Stay Tuned: The next episode promises an incredible guest, offering more insights and strategies to further empower your real estate investing journey.