What do you know about transactional funding? Wholesalers often locate deals with motivated sellers who agree with the arrangement. The wholesaler then locates an end buyer, making a slight profit without being involved in the actual transaction. However, there are cases in which this isn’t always an option; for example, no assignment clauses often force wholesalers to use a simultaneous or double closing. Instead, wholesalers utilize transactional funding for a short duration, the time it takes for the two transactions to close, typically back to back, anywhere from one to five days.
You may be familiar with the term ABC loans. For example, the seller is Party A, and you are party B, who takes the title in the first closing. After that, you will sell the property to an end buyer in another transaction, known as party C. Transactional funding is also known as flash cash or same-day funds. Read on as we explore what Cleveland wholesalers need to know about transactional funding.
When it comes to investment property, due diligence is key. You need to run the numbers and make sure the investment makes sense – no matter what type of funding you’re using. That’s especially true when it comes to transactional funding. After all, a deal is only as good as an investment. That’s why it pays to work with a local professional investor like those at Flavortown Properties. We know the red flags to watch for and can help you zero in on the best property to bring the highest returns on your investment. So if you’re looking for a sound investment in Cleveland, let us help you find the right property for your needs. We’ll make sure you avoid any nasty surprises down the road.
Hard or Private Money Lender
Cleveland wholesalers should understand that transactional funding is when a third-party investor wires the funds directly to the title company, allowing wholesalers to complete a deal and grow wealth without using their funds. You should be aware these funds cannot leave escrow. There is no credit or income check when you borrow these funds. However, you will need to have a purchase contract to confirm that the deal with your buyer is sound for the lender. Seasoned investors like the pros at Flavortown Properties can help you locate lenders to pursue this option if necessary.
Another thing Cleveland wholesalers need to know about transactional funding is that by using a double closing, the details are private and unknown to your buyer and visa versa, which keeps your profits from the transactions private. And while it isn’t anyone else’s business, there are still cases where knowledge of these figures has caused emotional difficulties to arise from both sellers and buyers and ended great deals. Working with highly skilled investors, like those at Flavortown Properties, means you can be confident that your transaction will flow smoothly.
Transactional Funding Fees
A transaction funding fee can range from 2 to 12%, which is another thing Cleveland wholesalers need to know about transactional funding. Delays in closing can add extension fees.
The seasoned professional investors at Flavortown Properties are familiar with everything Cleveland wholesalers need to know about transactional funding and are happy to help. Talk to one of our pros today, and you’ll see the difference for yourself that working with local investors who care about Cleveland and our neighbors here makes. Save time by working with the full-service team and our network of in-house providers at Flavortown Properties that can handle everything from locating the best investment for your needs to property management and everything in between. Helping our investors make the highest possible returns on their investments is the passion of the professional investors at Flavortown Properties. Save money by avoiding costly mistakes because you’re working with professionals for a small fee. And don’t forget to ask about the current inventory of the best investment properties available in Cleveland at Flavortown Properties. Call Flavortown Properties at (614) 665-5619.