Hi,
I’m new and wanted to learn about how to purchase a HUD home as well as other properties using transactional funding. Can anyone explain how transactional funding works and how I would need to setup an exit strategy properly? can you send me a step-by-step? Your suggestions are welcomed
what are you trying to do?? Transactional funding is usually needed when you don’t have cash and need to purchase a property to immediately resell… They usually give 2 to 3 months at the most to close…
examples of when to use transactional funding - when you need funds to close on an REO…
Usually transactional funders will do the deal, but they need proof that you have a buyer lined up ready to purchase the property from you…
It’s expensive money, but worth it, if you don’t have the money to close…
On the other hand, if you want an equally expensive, but longer term loan, a hard money loan will work as well…
As i said, it depends on what you’re looking to do…
When you have a buyer lined up, the buyer will be required to have some substantial money down as as a non-refundable (hard) earnest money deposit.This way you can reduce chances of buyer walking away.However i don’t think there is an exit strategy that can work to your advantage if the buyer walks away.
Maybe hard money loan would be a better option for you, but is expensive.