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2507, 2025

What is a Proof of Funds Letter

The real estate industry is constantly evolving, and the requirement for a Proof of Funds Letter is one of the more significant recent developments. Historically, when a potential buyer for a real estate property signed a contract to purchase it, it was assumed that the buyer had the necessary funds or financing to close. However, times have changed, and so have the requirements many sellers now want from buyers. Starting in the mid-1970s, several professional real estate investors decided to add an income stream to their real estate interests by teaching students to become real estate investors. The difference between [...]

2507, 2025

What is the Ultimate Funding Vehicle for Real Estate Investors Who Wholesale?

I have been funding transactional or “same-day” closings (wholesale flips) for real estate investors for many years. This same-day practice enables investors with limited funds and/or poor credit to engage in wholesale deals and generate substantial profits. Often, these investors have had to put up an Earnest Money Deposit (“EMD”) when they contracted to buy the property. Still, these amounts are minimal in comparison to the amount of money they need to purchase their properties. These wholesale flips are often referred to as an A-B and B-C transaction or “double closing”. The letter “A” refers to the original seller, letter [...]

2107, 2025

Transactional Funding for Raw Land

The new “gold rush” has been on for the last few years with no end in sight!  It involves purchasing and reselling raw land.  Historically, raw land has drawn a lot of real estate investor interest after a bull market has been in effect for years.  The logic here is that there are no “good deals” remaining, and raw land is readily available and usually affordable. The percentage of raw land that I historically funded was typically 3.5% to 5% of my wholesale closings.  However, in recent years, that percentage has risen to over 30%. As a transactional lender, [...]

1312, 2022

What is Shadowing in a Real Estate Closing and Why is it Important?

  Shadowing is the process whereby an attorney looks at his client’s closing documents. This attorney is not the same attorney doing the actual closing, rather it’s one of the “opposing parties,” the seller or the end buyer. The most important documents are the deed, title policy, and closing statements. Closing agents/attorneys make a commission from the issuance of the title policy, and it can be 70% to 80+% of the actual title policy cost on the closing statement. This is usually more than the “Settlement Fees” the closing agent charges. This source of revenue is why closing [...]

812, 2022

Do I Have to Go to Both Closings A-B and B-C?

  The short answer is “no” to both having to go to the A-B and B-C closings. • The usual reason is the inconvenience of having to make a trip to the closing agent especially if you are wholesaling virtually. • The more important reason is that if you sit at the closing table with your seller and your end buyer, you run a substantial risk of either of them trying to get more money (seller) or less profit (the end buyer) from you. • The closing agent will handle any objections about the seller or end buyer [...]

612, 2022

What if My Seller Wants to Close Before My End Buyer Can Close?

Buyer and seller coming to closing   If your seller wants to close even a couple of days before your end buyer, there can be a massive problem.   The transactional funder runs the risk of funding 100% of the A-B closing and the end buyer (B-C) not closing.   The usual result is a foreclosure action for the transactional lender to recover as much of his money as possible.   Therefore, one of the top priorities of double closings is that they close on the same day with the same closing agent.   No matter how “strong” [...]

112, 2022

Will the Seller or Buyer Know How Much Profit I Made If I Double Close?

Keeping Wholesaling Profits Concealed   If you double close, the seller and end buyer should not know what profit you made, well maybe. I say “maybe” because you need to understand the working of a double closing so you can “head off” any issues you may encounter. Ideally, what happens in a double closing is the same closing agent will close the A-B and B-C legs in separate rooms or at different times on the same day. Then the closing agent will record the required closing documents in the sequence of the first set (A-B) and the second [...]

2911, 2022

How Can I Overcome a No Assignment Clause?

There are two ways to overcome a No Assignment Clause.   The first assumption to this question is that the language in the Purchase and Sale Contract specifically states there is a “No Assignment” clause. I mention this because most Realtor contracts have three options – May Not Assign, May Assign, or May Assign with Liability. If this is the case, and the contract doesn’t specifically require one of the options to be chosen, by not checking any option you have an assignable contract. This may sound incredible, but it’s true, and we have used it for [...]

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