Posted almost 14 years ago

Transactional Funding and Why We Need It to Flip Properties in Las Vegas?

I have written several articles lately announcing the return of profitable flipping conditions in Las Vegas, NV.  Las Vegas has led the nation in foreclosures since the real estate bubble burst approximately three years ago, and we have seen our home prices plummet to $0.30 on the dollar or less.  Simultaneously, this wave of foreclosures has created a large demand for rental properties as former home owners become home renters.  This has resulted in rents that have remained relatively stable as the prices of homes have steadily dropped.  This unique set of circumstances has generated positive cash flow scenarios for investor buyers that haven’t existed in Las Vegas in decades.  It has also created a niche for those looking to flip properties once again.  

Most of the foreclosures that are being sold at auction and through bank owned REO listings need only minor, cosmetic repairs to bring them up to rental standards.  Investors willing to purchase these properties, can put $5K-$10K into them and then turn around and sell them to investors for a reasonable profit. These investors are still able to purchase the property at a price that makes it possible for the property to generate strong positive cash flow at prevailing market rents.

The catch in this process is that, in order to acquire a property at the Trustees’ Auction, the prospective buyer has to come with cash.  Many flippers (such as myself) have the resources and ability to flip multiple properties simultaneously, but lack the personal cash reserves to tie up more than one or two properties at a time.  This is where transactional funders enter the picture.  My transactional funders loan money to me on a very short term basis in order to purchase properties at the auction or through the banks.  These funds are always protected by a first position lien on the property.  Once the properties have been successfully rehabbed and held for the minimum time period specified by the bank (usually 30 days), they are resold to my investor clients and my transactional funders are repaid in full.  The transactional funders usually see their money tied up for no more than 35 days and they are paid 3% on their investment.  This equates to 50%-125% annualized returns on the average transaction.

If you are interested in providing transactional funding for upcoming projects, or to receive more information on the over one dozen flips that I have successfully completed within the last few months, please contact me:

Glenn Plantone
[email protected]
(702) 769-9872