All Forum Posts by: Shari Peterson

In order for that realtor's buyer to get that FHA loan, you must be the owner for 90 days. On Day 91, the realtor can write a contract offer and the process can begin to get the buyer approved for the FHA loan. At that point, you're looking at another 4-6 weeks before it would actually close. So you'd have to plan on holding the property for 4-5 months. That would require that you get a hard money or private lender loan to close on it by 1/17.

Have you tried asking the seller for a 30 day extension? If they aren't readily amenable to that, you could offer a $25 per diem or perhaps a $500-$1000 additional non-refundable EMD. That would at least buy you more time to find a lender to get a loan for you.

Don't let it put a damper on your wholesaling gig! You can use transactional funding or assign the contract. As a general rule, assign if the profit spread is less than 10%. Use transactional funding if the spread is higher OR is you cannot assign it because it is a short sale, REO, HUD or another non-assignable contract.

That has been my experience. Anybody else want to pipe in? In fact, the whole reason I began offering transactional funding is because I USED to do short sales, REO, and wholesale flips using the C Buyers funds. Then that all came to a crashing halt about 2008-2009. So, I had to find private lenders to fund my deals. I figured that if I needed to find lenders, then so does everyone else doing that type of investing. That is when I switched up my business model.

I say MOST because there are still some title companies which will still pass through the funds from the C Buyer to the A Seller. 

Most title company these days will not do a double closing as you describing, using the funds from the C Buyer to pass through escrow to pay off the A Seller. Underwriting by most title insurance companies won't allow it. Back in the day (now I sound like I'm ancient) we used to be able to do exactly what you describe. But that all stopped about 2008-2009. Now, you must come to the table with your own funds to completely close the A-B transaction. Then you can close on the B-C.

I have used Accurate Title on many occasions. They were on top of their game. They do double closings but (as with most title companies) require that the A-B be independently funded and recorded before they can close the B-C.

I can recommend a closing agent in Fort Worth. I'm not sure if I can post the name and phone number without breaking forum rules, so we can PM each other.

Are investors doing Wholesale Double Closes in Michigan using Transactional Funding? I am hearing conflicting reports. I'd like to hear from investors who may be successful in doing this type of investing in Michigan.

@Gary Dezoysa , you should know that Wholesaling is handled differently in California if your plan is to "Double Close". First, a primer on whether you should Assign or "Double Close".

You should Assign a contract if the spread is relatively small between the amount you can buy the property for and the amount you can sell it for. As a general rule, if it is less than 10%, Assign the property. In California, the prices are much higher so you may be looking at a number between 5-10%. This spread is the Assignment Fee. Basically, the Exit Buyer pays you this Assignment Fee to buy the contract from you. 

The bottom line is, "How much will the Exit Buyer pay you for the contract?" If you're buying for $300k and want to Assign for $30k, will the Exit Buyer think that is excessive, even if the numbers work on his end? That is the real question. If he/she is an experienced and reasonable investor, they may not consider it excessive. But, I've seen plenty of deals where the exit buyer walks or demands a cap of say $10k. Then, your deal falls apart. It is a strategic decision on your part of a Wholesaler as to whether you should Assign or "Double Close".

There are a couple of situations when you should "Double Close". Either you can't Assign, because the deal is a Short Sale, HUD, or REO deal, or because the the homeowner doesn't like the Assignment clause. Those sellers will not accept "And/Or Assigns" on the contract. The other time you "Double Close" is when you don't want to reveal to the Exit Buyer how much profit spread you are making. You close the first transaction, the A-B, with Transactional Funding. Then there is a second closing, the B-C, where you pay back the Transactional Funding and walk away with your profit. A=Seller, B=Buyer/Seller (you), and C=Exit Buyer.

Now, to California. In California, you can not close the A-B and the B-C on the same day. This is the reason why I have been using quotes around the term "Double Close". That is how most people think of a Double Close -- both close the same day, with the B-C closing immediately after the A-B. In your state you must record the A-B closing, and the following day you can close the B-C. With Transactional Funding, a requirement is that 100% of the C Buyer's funds must be in escrow before the funds are wired in for the A-B close. So, as long as the C Buyer is on board and will wire the funds into escrow, and the Transactional Funder is ok with the deal taking a couple of days, then you can still "Double Close".

I am interested in hearing about everyone's experience with the Cameron Dunlap system.

@Ann Bellamy can you PM me the contact info for Grugnale and Schlesinger? It's always good to know of those qualified and experienced with closing transactional funding deals. Thanks.