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Updated over 8 years ago on . Most recent reply
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Transactional loans for Virginia wholesale?
Need some advice/info from fellow Virginia wholesalers...I am under the impression that to assign a contract to the end buyer I need to have a transactional loan to close the deal. Is that correct? If so, how do transactional loans work and what do I need to do in order to close. (I say transactional loan because I don't have the funds to close on my own right now)
Thanks
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@Kenny LewisNo, it is not a law, and most of the time, it is not needed if you have a cash buyer. However, if you have a huge profit or markup, some C buyers will raise an eyebrow and may give you a hard time. Common terms in the transactional funding industry: A=seller, B=investor/you, C=end buyer. This is another common reason for large-profit wholesale transactions to use transactional funding. Transactional funding requires 2 closings, and therefore you don't have to disclose to your C buyer how much you paid the A seller. However, anyone, including A and C buyers can find out how much you paid for what after the closings via the county recorder's office. C buyers, in theory, should not mind how much you as the B investor make, but in some cases, that is not reality.
Hope this helps,
Duane.