All Forum Posts by: Ted Akers

Hi @Karin Crompton

The time frame is fairly short for same-day deals, 2-4 days is usually workable depending on availability of the closing attorney for us to interact with him. Regarding the HML, I think using his funds for the initial purchase is the scenario your attorney is not comfortable with.

Transactional funding does accomplish what your attorney is looking for, which is separate funds to close each transaction. Make sure your attorney understands that transactional funders will require the hard money lenders funds to be in possession of the closing attorney along with their loan documents executed by you and them before authorizing release of funds on the A-B initial leg purchase. That B-C leg does not legally close until your purchase is recorded, but for transactional funders the HML funds and documents do need to be in escrow ready to close right behind your purchase.

@Russell Ponce

Anyone telling you that double closing are "illegal" is either uninformed, or works for a title company that does not like back-to-back closings. Some title companies have taken the position that they want a day or two or three separation between the A-B-C transactions, but that is a CYA position of the title company so they can clearly show that the end buyers funds were not used for your purchase. As to the "full value to the seller" that is more applicable to short sales, in which case you DO need to disclose in your purchase contract that you are an investor and you retain the right to sell the property for a profit. The bank can either choose to accept your contract or not.

It appears that @Michelle White

gets it. I know some title companies in Chicago do want to see the separation by 2-3 days, but again that is a situation where they are not competent or comfortable enough that they can document that there were two distinct transactions which were separately funded, the first by you with transactional funding and the second with other funds from your end buyer.

A conventional mortgage lender for your end buyer will not fund on a contract being assigned. They would require you to be in title and for that sale contract to be between you and the end buyer. You would need hard money, private capital, or transactional funding. These are workable but expensive and a challenge to fund for transactional funders because the funding amount is noticeably higher than a hard money loan (less equity cushion). Transactional funders need to shift that risk by requiring you to have the end buyer very financially committed to the deal (higher than typical non-refundable earnest money in the 5-10% range depending on the specific deal) and no remaining contract contingencies at the time we would fund your purchase.

@Cameron Ellis

You cannot assign a HUD contract and transactional funders will require you to have an end buyer. If you do not get one you can back out all the way to closing but will lose your earnest money. You also want to know that some HUD appointed closing agents may not want to close both transactions, so you may need to move it to an investor friendly title company. In some parts of the country HUD stipulates up front that you can pick the title company.

@Joseph C.

I will consider it depending on the details of the B-C leg. If you wish, email me details of both sides of the deal.

Thanks,

Hi @Paul Moran

No, definitely not referring to Ann. That model is promoted by him and other coaches out there where they sell their own deals (either rehab or cash-flow) to their students.

Several others out there have a similar model, which is a VERY interesting one - charge significant fees for coaching new investors, and at the same time add them to their list of somewhat captive buyers for the coaches deals. Since they coached the new investor, who is now appreciative of all they learned and then probably trusts them, the property they are selling the new investor must be a great deal since it is coming from the coach - obviously...:).

Hi @Ben Bakhshi

Please update us later if Quicken loans does fund a flip inside of 90 days. Most lenders will not fund inside of 90 days if it is a conventional mortgage (FNMA or Freddie). Just a suggestion, but you may want to request who you spoke with to ask their underwriter based on your detailed explanation of the deal and timeline. I suggest this because most loan officers, especially at larger lenders, deal with mom and pop buyers and not investors flipping properties. I hope it works and would love to hear that it does.

@Craig Brouillette

FHA over the past three years fortunately allows a resale within 90 days of your purchase, but with a requirement that two appraisals be done if the resale price exceeds 120% of your purchase price. The irony is that the 120% does not allow for rehab dollars you spent. Individual lenders underwriting for FHA can also impose a 2nd appraisal requirement even if the resale does not exceed 120% of your price as a CYA procedure. If you wait until day 91 for your sale contract you should typically avoid the 2nd appraisal requirement.

We do have to count our blessings that FHA allows resale within 90 days, because the vast majority of conventional lenders require 90 days of "title seasoning" with no exceptions. My understanding is that it is not required by FNMA or Freddie Mac but has become customary standard operating procedure. If you can find one and route your buyer to a portfolio lender you may avoid the title seasoning issue. However, portfolio lenders are a rare find these days. Most likely candidates are local banks or credit unions that may not impose title seasoning requirements.