All Forum Posts by: Ted Akers

Jon's explanation is correct. "Wet" closing refers to you bringing funds separate from the end buyers funds. You can either assign the contract, bring your own funds, or use transactional funding. More REO's than in previous years, but not all, are prohibiting assignment which is where transactional funding come into play. Also most title companies have been moving away from using the end-buyer funds for the past couple of years. If you plan to double close when speaking to the title company tell them you are wanting to do "back-to-back" separately funded transactions and you should get a better reception from most of them. You do incur two sets of closing costs, with the seller paying title fees on your purchase and you paying them on your resale. Most transactional funding companies are charging 1.75 pts. for use of those funds.

Transactional funding will be your least expensive route if you are able to schedule a "back-to-back" same day flip, typically with a cash end-buyer.  Private or hard money lenders will be necessary if you plan to do any rehab.  Good luck.

Subject to would be great if you can get him to go for it.  Transactional Funders will need you to have a buyer under contract that does have non-refundable skin in the game.  If the numbers are correct 400/600k most local hard money lenders would probably do it if you need to get the mortgage paid off quickly.  Good luck, sounds like a great deal. 

Hello @Rodney Byers 

Most transactional funders fund nationwide.  I have funded a couple of deals in Birmingham and looked at funding a small pool of properties there.  I do recall that a $30-$60K range covered much of the market there.  

Florida, like most everywhere, is an all cash scenario at the time of purchase or with a 5% deposit and the balance due the next morning.  It does not work for transactional funders because we look for a solid end-buyer to be under contract to be within the definition of "transactional funding".  Discounts can be found at  auction but you need to be careful.  You do not have access to the interior of the property, are subject to existing liens other than the one you are buying, need to understand if you are purchasing a first or second lien position, and you are subject to living with existing leases if one exists.  Also, you may analyze 10 or 100 properties before buying one at a significant discount.  Many that you analyze in Florida will be underwater and the bank will not significantly discount below current actual value, and many will be cured by the homeowner just prior to the auction.  I do not want to sound pessimistic - auctions may be the best place for discounts in this market, but are a challenging place to begin in real estate investing.

@Brandon Sturgill 

FNMA guidelines have nothing to do with your scenario, unless you are selling to a buyer using a conventional FNMA mortgage.  In that case most lenders will want to see a 90 day holding period, or "title seasoning", before they would fund your end buyer (unless the buyer puts 20% down); and this has nothing to do with your off market purchase.  Your title rep should be able to give a fast yes or no to you. 

I am not positive, but I think the guidelines are going to relate to restrictions on FNMA loans to an end buyer.  Any restrictions on your purchase will be in your purchase contract ( I am assuming you are buying from FNMA).  It has been getting much harder for some time to find a title agency willing to do simultaneous closings.  Your rep should be able to quickly tell you if they will or not, without sending you on a research mission of FNMA guidelines.

@Girard Curry 

@Ned Carey 

You guys have painful transfer taxes out there.  It has to have an impact on margins for flip and fix-n-flip deals.

@Girard Curry 

and @Ned Carey 

Thanks to both of you guys.  I spoke to him just after posting here, and he seems like a good guy.  He is apparently a bit skeptical of transactional funders - must have had a bad experience somewhere along the line.  I look forward to showing him that I actually do fund.....:). 

Can anyone suggest an investor friendly attorney/title company in Baltimore County, MD.  I am not looking for anything exotic, just someone comfortable with a back-to-back closing with separate funds (transactional funding from me to a client) provided by both buyers.

Thanks,