Why Not Start With Simple Contract Assignments and Referral Fees

[Charles B.]

This is both a question and a thought for those who are just starting out in real estate investing (or perhaps have been around for a year or two) but have not really generated much revenue for their efforts.

Like many people I started off as a wholesaler. Any money I made, I made from assignment fees (we referred to them as quick flips back then). I see the same opportunities today, as I just witnessed a $25,000 assignment fee without anyone blinking an eye (either lender, buyer, etc.). Now granted this was a commercial closing, but I know the same principle still works for residential cash or hard money deals. My statement and resulting question is why so many new people seem bent on trying very difficult (requiring excellent credit or cash) methods to begin when assignments and referral fees are so easy to execute.

I am curious to hear what the new folks have to say. I would also like to hear a bit from some of the more experienced members of this board about the ease of using assignements and referral agreements.

My position is simple. It pays to build up your credit and cash reserves when you first begin any business, and real estate investing is no different. Rely on proven techniques (simple contract assignments and referral fees) where you efforts and the internet can produce income with little risk when you first begin.