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 [...]

1711, 2022

Is There Really Such a Thing as a No Money Real Estate Transaction?

This is a very common question, and the answer is both “Yes” and “No”.   The assumption we will work on is that the investor is asking this question regarding funding his purchase and sale. I mention this because that’s different from the actual expenses and costs an investor will have to prospect for and find motivated sellers. The first obstacle is the Earnest Money Deposit (EMD) which is too often a career killer for many wannabe investors. Solving this initial obstacle will save you a lot of time and heartache later. You can do this by [...]

1511, 2022

What is a Transaction Fee in Transactional Funding?

A transactional fee means different things to different transactional lenders.   The fees that transactional lenders charge are usually, but are not limited to the following: 1. A funding fee that is a percentage of the actual amount a transactional lender funds for the A-B closing, i.e., $100,000 at 1% = $1,000. 2. A wire fee to cover the expense the transactional lender pays for his wire to the closing agent varies greatly depending on the bank the lender is using. NOTE – you should always check to see what minimum fee the transactional lender charges because [...]

1111, 2022

Why Not Just Use a Hard Money Lender for Transactional Funding?

I love this question because it should be an obvious answer but it’s not!   Ironically, most hard money lenders don’t loan funds for same-day double closings. This may sound silly but it’s a fact because they consider same-day transactional funding very risky. What may be surprising is they are correct. Despite what the public thinks about the “safety” of transactional funding, it is fraught with potential issues that only result in one end – the complete loss of the transactional funder’s money! Without disclosing the specifics of what all can go wrong, suffice it to say [...]

811, 2022

How Can a Transactional Funder Fund an EMD?

  In the previous FAQ about transactional funding, I was asked how to do deals with no EMD. The answer to this question, how can your transactional funder fund an EMD, elaborates on the various answers of doing deals with no EMD. The easiest way, if you are dealing directly with a seller, is to add a clause to your contract stipulating that you will provide the EMD on the day of closing. The most common way this is handled is your transactional funder simply adds in the EMD to the amount he is wiring to the closing [...]

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