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Author Topic: Transactional Funding  (Read 19258 times)

Offline steamnsteve

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Transactional Funding
« on: October 02, 2009, 09:41:40 pm »
Hi gang,  :help

Has anyone completed a deal using transactional funding?

Lot of these funding Companies on the internet.  And a few on this website.

Would like to know the deal went?  And the Company you used?  Any feedback?
Steamnsteve in Las Vegas Nevada 
Steven Kemp Investor/Realtor/Consultant

Offline Nick Brian

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Re: Transactional Funding
« Reply #1 on: October 04, 2009, 06:33:46 am »
Yes I did. If you want to know then you are most welcome. But there's a lot sites cover this topic. If you seek help you can find it elsewhere too.

Offline real estate 001

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Re: Transactional Funding
« Reply #2 on: October 04, 2009, 11:03:33 am »
NICK

Hey would like to hear about how your deal work   with this type of funding

Who you used for it  or would say is good to use

As there are a lot of people here  who have never used it  and would like to know how it  went   form  a person  who has

And  i was wondering  something as well  this

Has any one heard or know of a funder  that will do the transactional  funding  for 30 days  and not just a back to back kind of thing ?
« Last Edit: October 04, 2009, 11:09:53 am by real estate 001 »

Offline steamnsteve

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Re: Transactional Funding
« Reply #3 on: October 04, 2009, 01:32:44 pm »
Thanks for your input.  To my understanding transactional funding is good only for back to back closing.  Anything past one day funding is considered a loan. 
I have already talked to a few transactional funding companies I found on the internet. They said MAKE SURE your end buyer has the ability to fund and close the purchase on the same day.  Other wise they may pull the transactional funding out of escrow.

So your would loose your deal and most likely your security deposit from the escrow account for non performance on your purchase contract from the origional seller.  At least that's the way it works in the great real estate waste land of Las Vegas NEVADA.
Steven Kemp Investor/Realtor/Consultant

Offline investorman

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Re: Transactional Funding
« Reply #4 on: October 04, 2009, 02:17:48 pm »
I would also like to hear more details from Nick or someone else that has actually used transactional funding to complete a deal.

I've heard of many people that mention transactional funding as an option, but I haven't read of anyone that has actually used it.



 

Offline real estate 001

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Re: Transactional Funding
« Reply #5 on: October 05, 2009, 09:57:27 am »

JUST  keep in mind  a lot of people do not  want to talk about there  deals  for  what ever reason

So if  we do not get a response  to the question it is not because  it has not been done just that the one  who  has done it  is not wanttting to talk about it

Over the last year or two i have seen a trend to this   alot of  deal makers not  wantting to talk  about there deals 


I think   when asked   the more wiser   real estate  deal makers  should speak up  and help  the  not so wise

Offline steamnsteve

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Re: Transactional Funding
« Reply #6 on: November 08, 2009, 01:02:42 pm »
 I talked with a Real Estate Broker in Las Vegas about Transactional funding and double closing.  This broker has over 25 years of Real Estate experience in the Las Vegas market.  She said is is legal to do a double closing in Nevada.  However she also said many brokers will not let there agent be a agent in a Real Estate Transaction using Transactional funding.  She said the risk of being SUED by a Seller or Buyer was great due to the potentional of NON DISCLOSURE by one of the parties of the transation.  She has instructes her agents to first close the purchase by the Buyer.  Then write a new purchase agreement with the Second Buyer.  The date of the purchase agreement must be after the closing date of the orginal purchase agreement.

Any feed back on this subject is welcomed.
Steven Kemp Investor/Realtor/Consultant

Offline real estate 001

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Re: Transactional Funding
« Reply #7 on: November 08, 2009, 05:35:10 pm »

HEY was  wondering if any one knows fo a company that will do this type of funding

This would be for  commercial deals ?

Or just any company that will do temp funding  for up to max 30 days  for  commercial deals

Offline pbarrow

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Re: Transactional Funding
« Reply #8 on: June 12, 2010, 08:35:30 am »
I am a real estate broker and transactional funding lender in Denver.  I always err toward the side of disclosure when arranging back to back closings, using the following language in my contracts in the additional provisions section:
"Buyer is a professional investor and intends to resell the property for a profit." (a-b contract)
"Contract specific performance is contingent upon seller obtaining clear title in a separate transaction of the Property on or before closing of escrow."

These disclosures are significantly more important and should be expanded to separate documents when dealing with a short sale on the buy side.  Many lenders now are requiring seasoning periods, which negates the use of transactional funding.  I keep a log of regulatory changes

altered due to rules violation
« Last Edit: June 23, 2010, 02:55:52 pm by Mdhaas »

Offline eric3

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Re: Transactional Funding
« Reply #9 on: June 23, 2010, 01:51:02 pm »
I agree with Paul, disclosures are very important.  I am a transactional lender too.  Not sure why people might not want to discuss these deals.  They are pretty straightforward and simple.

For the person getting advice from the Realtor, forget them.  They know little about this.  It is all about finding the right Title company who knows the transactional process.  They handle everything.

The investor just needs to get final approval on the A-B transaction and get a solid B-C contract in place for the same day (back to back closings...not simultaneous).  The trans lender will work with the Title Agent on the funds.  Fees range from 1.5-2 points.

Transactional Deals longer than 1 day are much different and much riskier.  Not many lenders do them any more.  I do the locally in Chicago only.
www.NorthSideFunding.com.  Nationwide Transactional Lending and Chicago-area Hard Money Lending.

Offline Rastusracing

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Re: Transactional Funding
« Reply #10 on: July 02, 2010, 11:57:57 pm »
The biggest issue to being able to use transactional funding is the flipping rules by FHA, not sure if Fannie / Freddie are following FHA's lead on this yet, I havent looked, but if you want to know, I will look it up if you want.

FHA will not fund a loan where the seller in the transaction is not on title, period, that includes assigments. The only way that they will is if the seller is on their list of excluded investor entities. A private investor / person, will not ever be on the list.

What that means is the only way a private person can flip is to be on title 90 days or more. Here is another kicker, in the lending world these days, it doesnt really matter what FHA, Fannie, Freddie, and VA underwriting guidelines are, the individual lenders underwriting overlays are always way tougher and they are the ones with the gold, so they make the rules. Dont get me wrong, it can still be done, but the end buyer may not be able to use financing via the traditional channels, or the seller may have to sit on title til the 91st day before signing a purchase agreement.

Gotta love these new rules. I have figured a way aroound it, but it took some very creative brain juice to get there. 
Kevin Romines
Insurance Agent
Country Financial
Olympia, WA 98501

Offline eric3

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Re: Transactional Funding
« Reply #11 on: July 03, 2010, 12:17:35 am »
This is not a factor.  FHA suspended the 90 day rule 6 months ago.

Transactional funding is easy to do, I have done many.  There are many C lenders who will do it.
www.NorthSideFunding.com.  Nationwide Transactional Lending and Chicago-area Hard Money Lending.

Offline Rastusracing

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Re: Transactional Funding
« Reply #12 on: July 03, 2010, 12:48:04 am »
I'm not looking to disagree with you, but when they lifted the flipping rule, it was purely for those entities on their excluded list. A private person is not exempt from their flipping rules, period. If you havent read the policy, well here you go. This is from the FHA handbooks, in the last 3 minutes!!!
http://www.fhaoutreach.gov/FHAHandbook/prod/infomap.asp?address=4155-2.4.7
e. Restriction on Re- Sales Occurring 90 Days or Less After Acquisition
If a property is re-sold 90 days or fewer following the date of acquisition by the seller, the property is not eligible for a mortgage insured by FHA.



FHA defines the



•seller's date of acquisition as the date of settlement on the seller's purchase of that property, and
•re-sale date as the date of execution of the sales contract by a buyer intending to finance the property with an FHA-insured loan.


Reference: For exceptions to this 90-day restriction, see HUD 4155.2 4.7.h
Kevin Romines
Insurance Agent
Country Financial
Olympia, WA 98501

Offline Rastusracing

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Re: Transactional Funding
« Reply #13 on: July 03, 2010, 12:51:56 am »
Here is the excluded list of entities that dont have to be on title for 90 days and the end buyer can still use an FHA loan. If your a lender, I assume you have access to what I'm copying and pasting here through the handbooks?

http://www.fhaoutreach.gov/FHAHandbook/prod/infomap.asp?address=4155-2.4.7.h

h. Exceptions to the 90 Day Restriction
The only exceptions to the 90 day resale restriction described in HUD 4155.2 4.7.e are for



•properties acquired by an employer or relocation agency in connection with the relocation of an employee
•re-sales by HUD under its Real Estate Owned (REO) program
•sales by other United States Government agencies of single family properties pursuant to programs operated by these agencies
•sales of properties by nonprofits approved to purchase HUD owned single family properties at a discount with resale restrictions
•sales of properties that are acquired by the seller by inheritance
•sales of properties by state and federally-chartered financial institutions and government sponsored enterprises
•sales of properties by local and state government agencies, and
•sales of properties within Presidentially Declared Disaster Areas.


Any subsequent re-sales of the properties described above must meet the 90 day threshold in order for the mortgage to be eligible as security for FHA insurance.



Note: HOCs do not have the authority to waive the 90-day resale restriction because it is a regulatory requirement and not an administrative policy.
Check me on it if you dont agree!!!
Kevin Romines
Insurance Agent
Country Financial
Olympia, WA 98501

Offline eric3

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Re: Transactional Funding
« Reply #14 on: July 03, 2010, 02:58:48 pm »
You can quote whatever esoteric code you want.  The bottom line is the 90 day flip restriction is not a real impediment to doing any deal with transactional funding.

It has not been an issue in ANY transactional deal I have done, so your warnings about it are unnecessary.  That is all I am saying.

Eric
www.NorthSideFunding.com.  Nationwide Transactional Lending and Chicago-area Hard Money Lending.

 




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