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A Novation agreement is a strategy for flipping houses without using your own money. The speaker illustrates this by explaining how to negotiate the purchase of a car using Craigslist as an example. They propose offering $8,000 for a Toyota Sequoia listed at $9,000, even though they don’t have the funds. The concept of finding someone who can provide the needed amount is emphasized as part of the Novation agreement process. However, the speaker expresses skepticism about Novation agreements, noting that while they can be useful in real estate, they prefer purchasing properties "subject to" existing financing. Overall, they suggest that negotiating lower prices on vehicles is generally fruitful.
