All Forum Posts by: Ted Akers

I charge 1.75% up to $1MM plus a $495 closing/doc fee, but the fee is not paid upfront and is only deducted from the second closing.  I do not charge applications fees, but may require an appraisal if it is an extended transactional funding (not a same-day or back-to-back closing). 

@Account Closed,

You may end up with a holding period requirement if you are buying from some banks or FNMA, typically 30 days. The "seasoning requirement" does not apply directly to you but refers to mortgage requirements imposed on your end-buyer, if they are using a mortgage. FHA suspended their 90 day title seasoning for several years but now again imposes it. Conventional mortgage lenders have always imposed it. It means that if a property has recently changed hands they will not lend to your end buyer until you have been in title for at least 90 days. When attempting quick flips cash-buyers should be your primary goal.

Hello @Ken Adkins,

The distinction between "wet" and "dry" funding generally applies to transactions involving a mortgage, so may not be a relevant distinction unless your end buyer is using a mortgage.  Dry funding generally means that funds do not transfer immediately at signing of the closing documents. Transactional funders are typically looking for your end buyer to be using cash for their purchase.  Is your end buyer a cash buyer or are they funding with a mortgage?

The easiest way to think about it is that title companies (or your closing attorney) want to see "separate" funds for both transactions.  As Don mentioned, the old days of "simultaneous" closings using your end buyers funds are generally gone (whether in a wet or dry state); because title wants to see two distinct transactions that are separately and independently funded.  I am a transactional funder that has funded in dry states.  If your end buyer is a cash buyer a "back-to-back" transactional funding can be accomplished with a slightly different time frame for when the recording and transfer of title takes place.  If your end buyer is using a mortgage that is a different issue, as most mortgage companies will require 90 days of "title seasoning".  Thus, you cannot transfer title to the end buyer until you have owned the property for 90 days.  If that is the case transactional funding can be used but is usually not a real viable option due to fees (they are high due to funding at or close to 100% of your purchase, rather than 65% for most hard money deals).

I specialize in transactional funding nationwide.

Thanks

@Daniel Smith

Definitely retain an experienced foreclosure attorney.  Colorado passed the Foreclosure Protection Act in 2006, which is designed to protect homeowners from "foreclosure consultants" and investors.  I am not an attorney but can tell you the law is very specific regarding: what you can and cannot tell the homeowner (do not tell them you are there to "help" or can stop the foreclosure - you are there only to buy the property), the contract must be at least 12 pt. font, the homeowner has to have 24 hours to review before signing, the homeowner signature must be notarized, if they speak a second language the contract must be presented in that language also, do not try to put a lien on the property, fines up to $25k and one year in jail, treble damages to the homeowner, etc., etc.   It also requires "extended transactional funding", if you were to use transactional funding; as you cannot close both your purchase and resale on the same day for foreclosures as we can in most all other states.

This post is not at all intended to dissuade you, and I applaud your drive.  Colorado was one of the first states to pass this type of legislation and is serious about it.  Push forward but be sure to have someone on your team that thoroughly understands this legislation.   The numbers sound very good, especially for the very hot Denver market.  Make sure you are comfortable with the value (talk to a realtor you trust) and make sure to pull a title report to see if there are other liens.  Best wishes closing on this one.

Hello @April Kraft

I have funded transactional deals for 6 years and have always suggested to my clients that they engage professional full time negotiators when attempting to buy short sales.  There are many reasons but the primary one is that an experienced short sale negotiator understands the differing processes of the various short sale banks and is more adept at negotiating a better price.  The short sale process can be daunting, depending on who the short sale bank is, and can take from a month to a year or more to complete.  If you are new to the process it can be easy to get lost in the lender shuffle.

I do not know Rich or Jessica, but they appear to have good experience in loss mitigation, which is the Lender side of the short sale and foreclosure process.  I would contact them to see what their fee arrangement is to negotiate on your behalf.  Many negotiators only charge only on a success basis.

You do want to be aware that title companies in Texas, more so than other states, are more likely to want separation between your purchase and resale; meaning same day transactions are somewhat less likely and a bit more of a challenge for transactional funders.  Being in that market Rich and Jessica are also likely to know investor friendly title companies.

Best wishes on your file. 

HUD typically will not allow assignments, so transactional funding can work. You also want to be aware that some HUD appointed closing agents will not want to perform closings for both your A-B and your B-C transactions. Their allegiance is with HUD and their primary interest is the business they receive from them and in closing the A-B deal. In that case a "Split Escrow" can be used where a different closing agent handles the B-C transaction. Transactional funders in general do not like Split Escrows, but they are possible.

Please email me details of what you are looking for.

Thanks,

@Isaac Ramos,

Because your buyer is using conventional mortgage financing you want to check and verify what the lenders "title seasoning" requirements are.  Most require 90 days of title seasoning on a flip transaction, unless the buyer is putting 20% down payment.  This means the buyers lender will not fund them until you have been in title for 90 days.  Make sure the lender understands that this is a purchase and fast resale and try to get a response in writing from them because many underwriters will not know the specific requirements or that they can waive the requirement with a 20% down payment (they do not deal with flips frequently).   The fact that the property is being flipped frequently gets caught late in the game by the lender (frequently in a quality control audit just before going to documents) which can burn a lot of you valuable time available under your purchase contract. 

@Undrea King

I just funded one with Christine Godbolt of North American Title Houston.  She may need one day separation between the closings.   Many Texas title company underwriters  want to see separation of anywhere from 1-5 days between the closings.  It is not an absolute requirement but Texas more than other states seems to focus on other than same-day transactions due to heavier oversight by their state regulatory body, which does make transactional funders less comfortable.