I am new to investing and one thing completely boggles my mind… getting a buyer for a property that you do not own. I was speaking with a lender that does transactional deals and he told me that they will approve any loan but you must have a buyer under contract before they will lend. I went along with what he said to save face, but in the back of my head I couldn’t put it together how it is possible. Thanks for the advice in advance.
Hi,
Once you have a legal contract you control the property, so you have the right to "Sell Your Position" which basically say's "You can sell by any legal means" which is exactly what your doing!
Transactional Funding will finance any property where you have a contract, earnest money and have fulfilled the inspections and contingency removals and simultaneously you contract to your end buyer (Who has a Mortgage Approval Already) with you as seller, you have all your inspections put in your buyers name, and you coordinate an appraisal in your buyers name, everything is done to close your main purchase A (Seller) to you (Buyer) which will close in the afternoon using transactional funding and then the sale from you (Seller) to your end (Buyer) will close the following morning.
All the paper work, signatures, funding, etc. for both escrows is recieved and in hand by the escrow company prior to closing your main purchase with the transactional funding and then it’s just a matter of waiting 18 hours or so and closing the sale to your end buyer the next morning!
(Each transaction is processed on a different date, 4th and 5th)
These deals are done by investors every day as it is very common!
GR
Although one can have legal rights even not being a owner, sometimes Special Attorny General one but the strongest form of ownership is when you are yourself a legal owner to the property/thing. Legal owner means with legal power of possession not on any other person’s behalf.