Timing the funding to maximize profits. Massachusett Investors advice needed!

[Ronald H.]

:D I want to wholesale properties and use transactional funding to complete my first few deals.

Some of the available funders say "No-out-of-pocket costs at all." on their websites. All of them say their funding covers "all closing costs." although one says this as well but in the F.A.Q.'s section they say they do not cover the Earnest Money Deposit. I am confused as to what their versions of no-out-of-pocket costs mean, I am assuming that all but Coastal Funding are paying the Earnest Money Deposit.

Also, I have seen it posted here on Biggerpockets that investors need to use these funds quickly because they become very expensive, so I think it is crucial to attend closing with the knowledge of how to get it as efficiently as possible.

QUESTION:
With an F.S.B.O. the timing of the E.M.D. can be negotiated I think but with R.E.O.'s will the Lender want the E.M.D. too far in advance for the Transactional Funding to be cost effective or work period?

If you have used Flash Funding to purchase an R.E.O. from a Bank then you would know how to time all of these so you would only need 24 hours to get this done.

If you needed a Proof of Funds letter for a month it would probably cost you an Arm and a Leg.

Thank you all and have a Happy New Year!

:mrgreen:

[Jeff Warner]

Ronald,

First off, I want to point out that when it comes to FSBO's there is no need for transactional lenders, only for REO's and Short Sale flips because those transactions need to be fully funded.

Also, most transactional lenders (if not all) don't lend the money unless you have a buyer in place prior to your closing date. There is only one instance that I'm aware of that would require you to use transactional funds for 30 days and that is for BofA Short Sales that require a 30 day "seasoning".

Perhaps you are referring to a Hard Money Lender? Also, when it comes to EMD, depending on your contract that you use a lot of people don't give any EM on FSBO deals. With REO's, you can tell the agent that your EMD will be given within 48 hours of offer acceptance.

Also, in reference to your POF...that is something you'll need when submitting an offer on an REO and they don't cost you any money.

Jeff