All Forum Posts by: Duane Ortega

@Account Closed

John Anderson was correct that transactional funding works best with a cash buyer.  I would like to add that it also works with a C buyer with hard money.  Conventional funding for C buyer however rarely works for a number of reasons which implies that C retail buyers are not your market.

@Account Closed

John Anderson was correct that transactional funding works best with a cash buyer.  I would like to add that it also works with a C buyer with hard money.  Conventional funding for C buyer however rarely works for a number of reasons which implies most retail C buyers are not your market.

@Trey Brooks

If double closing, ensure you also have a contract with your end buyer. Go to closing agent (whether it is attorney or title company) and arrange for closing on same day where C buyer's funds are in escrow before double close funds are in escrow since most funders require this. Contact double close funder and arrange for funding. Quarterback the coordination between all parties and then close. That's it in a nutshell. I would also suggest go to your local REIA and see what other wholesalers do since there might be local nuances that only local folks know.

@Nicole Martin

For the wholesale portion, @Motu Lemafa is absolutely right.  If you have no money to buy it, transactional funding is perfect for the purchase since this type of funding typically provides 100% funding.  Then you attain your profit from the difference between the 2nd closing less the 1st closing less closing costs and transactional funds and fees.  I'd be happy to answer any questions you may have regarding this type of funding.  PM me.

@Shiya Umpant

@Shiya UmpantOther reasons to double close is because you may not be able to assign your contracts (HUDs, REOs, Short Sales) or you don't want to be considered as brokering without a license which is getting more popular with states.  Double closings avoid all this since you are actually purchasing the property, and then of course reselling it quickly.

@Matthew Haskins

Yes, and you should also ensure that your end buyer's cash or C lender's cash is in escrow before your funder's cash as most double close funders require this.

@Rigo Medina

I can give you a link to a discussion with an Ohio attorney discussing if wholesaling is illegal that may be able to help you and your friend.  PM me if interested.

@Dawn White

Dawn, I have the opposite belief - "Simultaneous" has a bad connotation (where you would use C's funds to pay AB closing) and the proper term is "Double Closing" (where you would use separate funds).

Terms aside, the proper way to do this these days is AB is funded by B's funds or B's borrowed funds and BC closing is funded by C's funds/borrowed funds.

As far as it being illegal, I am not an attorney, but as far as I know, it is technically NOT illegal to use C's funds to close AB.  Before everyone stands up and yells... I remember seeing those letters from First American and Chicago Title around summer of 2010 or 2011 (I forget which year, long time ago) mandating all their associated title agents to ensure that both parties came in with separate funds.  Therefore, It was just a mandate from the title insurers and title agents had to comply in order to be in good standing with their insurers in order to mitigate the risk of fraud as there was rampant fraud with "simultaneous" closings.  Point is, you won't go to jail for it if you do a simultaneous closing, it just won't be ALLOWED anymore from that point forward by the big insurers/all insurers.

I have not kept up with this topic in a while, so please, correct me if I'm wrong.

Thanks Alex.  I hear that sporadically from closing agents who are not investor friendly all over the country.  Some are just not in tune with the investment community when they say things like double closings are illegal.  Yet, I just closed one in their area last week :)  My point is that just because one closing agent says it is illegal, one may have to take it with a grain of salt and consult others such as the knowledgeable folks here in BP or their local REIAs.  Not sure how double closings can ever be illegal if you are actually buying a property with your own/borrowed good funds and then selling it to separate C buyer with own good funds unless one is not following rules such as using C buyer funds to fund the first.  Slippery slope if that becomes illegal...

@Alex Franks

May I ask why most lawyers will not even look at them in SC?