Discover how you can use novation in real estate to maximize your profits as a real estate investor in this week’s episode of the Forever Cash Podcast.
Investing in real estate is one of the most reliable ways to build wealth as an investor. However, as with any asset class, changes in market conditions, new legislation, and global events can impact your business.
The best way to deal with change is to stay well informed and share ideas with the top experts in the field.
With this in mind, I invited fellow Real Estate Mastermind Eric Brewer to speak on the Forever Cash Podcast about his unique understanding of novation in real estate deals.
If you would like to stay on the cutting edge of trends in real estate investing, make sure to subscribe to the Forever Cash Podcast on your favorite podcast platform:
What is Novation?
Novation in real estate occurs when you alter an existing contract by mutual agreement. You can change the party, term, or obligation. Novation is used often in real estate transactions and means that the original contract is voided. A new agreement can take effect without having to nullify and redraw the entire deal.
Using novation in a real estate deal means that you can change the:
- Property rent/price
- Lease terms
- Names of the purchaser, seller, landlord, etc.
- Earnest money amount
- Closing costs
- Effective date
However, you can leave the original terms and conditions unaltered. As a result, you will be able to selvage an existing deal with a few critical amendments rather than having to terminate your existing contract and start the whole process from scratch.
What Are The Benefits Of Using Novation In Real Estate?
If you are an experienced real estate investor, you will know that transactions in the housing or multi-family real estate market rarely go through without a hitch.
When you are flipping land, very few things can go wrong because you cut out all the complications. However, if you are branching out into other real estate assets, such as houses or multi-family units, you can expect as many deals to fall through as you manage to close.
However, if you hit a hurdle on your deal, you can apply novation rather than assume the deal is dead in the water.
Learn more about Eric’s unique use of novation in real estate at https://brewermethod.com/
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