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Updated almost 8 years ago, 12/18/2016
Transactional Funding
What are some of the transactional funding companies you would recommend using?
Hello Jamal,
I would recommend to do your own DD. Check out the information on the websites, check out their videos, FAQs, blogs, check-out references or testimonials, message the testimonials people via FaceBook, and ask around in REIAs, Google transactional funding and go down the list. Check out their response times. This is just some of the things you can do.
Most transactional funders only fund same-day back-to-back closings and don't do any extended transactional funding anymore. Some offer hard-money as well. Others also offer free Proof of Funds (POFs) in order to help the wholesalers get their foot in the door.
A legitimate transaction from transactional funding companies' point of view requires that you have a cash or hard-money C buyer in place and under contract. Also, a good closing agent is needed who is investor-friendly.
I have been in real estate investing for over 20 years and I don't readily give out recommendations. But I just have to say that one of the best experiences I have had with a lender bar none was with Shari Peterson at Capri Funding. Wow! I was totally amazed from the beginning how the transaction went. She listens to your needs and is very informative and respnsive. She responded to my needs in a very timely matter and kept me well informed throughout my entire transaction. The title company I was dealing with was not very cooperative with doing transactional funding and informed me that the deal wasn't going to work. I shared this with Shari and she immediately got on the phone with me and the President of my title company to walk through the issues. Most companies would have said sorry. By the way we discovered that the deal wasn't going to work from the title company one day before closing and my contract would be expired and also the seller was not going to renew. Shari does not lay down and is definitely not a quitter. She got the President of the title company on the line after hours and got me on a 3 way call with them and walked through some scenarios and found an approach that worked for everyone and saved the deal. Shari is extremely sharp and an excellent communicator. She knows how to think outside the box and make things happen. The thing I noticed about her is that she truly cares about you and your deal and is a great person of character. Anyone would be fortunate to get the opportunity to work with her. Look her up at caprifunding.com or reifunding.com You won't regret it and I promise you will be thanking me!
Thank you @John Patterson for your kind words. Sometimes it is required to get creative to stay completely legal and above-board, while complying with the requirements of the title company. Luckily, the President of the title company was open-minded and wanted to find a solution as well. I was pleased to be able to get the deal closed.
Jamal Hampton just use your end buyer's funds in escrow. Write it into your Backend agreement.
I thought there was a law passed that prevented you from using the end buyers funds.
Originally posted by @Raina Wells:
I thought there was a law passed that prevented you from using the end buyers funds.
We have three title companies we work with locally, one of them gets all our simultaneous closing wholesale deals. They said it is legal and not a problem with cash deals. We do 20+ deals like this a year.
Funds get wired to escrow in two seperate transfers, first one to match the amount on the first HUD, example Net from buyer 122,431.22. Second HUD shows earnest money in the amount 122,431.22, Net Due from Buyer 7,500 or whatever the difference between your buy and sell is. Some would call it a wholesale fee. I call it my profit so we are clear I am not acting as a realtor, but selling a property I just bought.
Originally posted by @Dell Schlabach:
Originally posted by @Raina Wells:
I thought there was a law passed that prevented you from using the end buyers funds.
We have three title companies we work with locally, one of them gets all our simultaneous closing wholesale deals. They said it is legal and not a problem with cash deals. We do 20+ deals like this a year.
Funds get wired to escrow in two seperate transfers, first one to match the amount on the first HUD, example Net from buyer 122,431.22. Second HUD shows earnest money in the amount 122,431.22, Net Due from Buyer 7,500 or whatever the difference between your buy and sell is. Some would call it a wholesale fee. I call it my profit so we are clear I am not acting as a realtor, but selling a property I just bought.
Wooow good to know this is very helpful
My lender does it nationwide. I don't have it on my website. Let me know if you need help.
@Dell Schlabach would you mind sharing the verbiage you used in your contract/back end agreement? about to do my first deal this way and I can use all the helpI can get :-)
Originally posted by @Jessica Sulliman:
@Dell Schlabach would you mind sharing the verbiage you used in your contract/back end agreement? about to do my first deal this way and I can use all the helpI can get :-)
@marvin mctaw, made a reference about writing something into the back end contract. Si he may have something of value to provide. I just explained to the title company, that I have a buyer for the property and would like to sell it right away, can I use the buyers funds to close, and transfer to my buyer right away.
We have another title company that is doing back to back closings for us now, with a cost savings. Their process is a bit different. I suggest you ask a couple title companies that you have a relationship with, whst you want to accomplish, ask them how you could do that and let them decide how they would like to do it. I don't use the terms double çlose, or simultaneous close, I just tell them I have a buyer, and would like to close to the new buyer right after it closes to me, can we do that. same day, or following day? If they agree to this then ask about using buyers funds to close. Some may want you to have a note from your buyer to you, so techinacilly it is your money. We write up a basic purchase agreement.
Some companies may want to not do a HUD on the second one, and do a courtesy transfer on the second deed, to the buyer, for the same price, buyer pays you for your fee. Title CO only chargees for the deed prep and second round of transfer taxes.
Best advise talk to title CO explain what you want to accomplish, and have them propose a method they are comfortable with that keeps everything legal.
I do them nationwide. Please reach out if you need funding.
Wow this is a great information.
So glad to be a member here!
Thank you all!
