Transactional Funding Ft Lauderdale Broward County cities continues to grow in popularity among real estate investors.
This video demonstrates the importance of Transactional funding lenders
and why to use local transactional lenders in the Ft. Laud, Broward area.
Broward County, Florida continues to be a mecca for wholesaling real estate in the nation. With its central location in the tri-county area of Miami-Dade, Broward and Palm Beach, it allows commuters easy reach of downtown Ft. Lauderdale’s, Palm Beach’s and Miami’s financial and service industry hubs.
Because of the transient nature and larger number of retired individuals, there are plenty of opportunities for finding motivated sellers. In addition, Broward County had the highest number of short sales and REOs (bank-owned properties) in the State as well as in the nation in the last few years.
Transactional Funding Ft Lauderdale Broward for real estate investors who want to do wholesaling is easily available at extremely reasonable prices – depending on the source of the actual transactional funder. It is always advisable that an investor looking for transactional funding personally call the companies he is looking at to do his funding and interview each one as to experience and “true cost” of the funds needed.
The process of double closings is necessary when the original seller’s contract will not allow an “Assignment of Contract” such as in short sales and REOs. In addition, if the profit spread is too large, the seller and end buyer may not come to closing.
In a recent actual case, an investor decided to save the cost of transactional funding despite his expected profit of $61,000. When he first mentioned to his end-buyer that he would like to assign his contract, the end-buyer agreed – before he saw the investor’s purchase price. The Investor also told the seller he would no longer be fulfilling the contract to close – the end-buyer was now closing in his place.
The cost of the transactional funding and the additional closing costs for the A – B leg were being “saved” by the Assignment of Contract and they amounted to about $5,400 combined. When the end-buyer and the seller got the single Preliminary HUD-1 Closing Statement both because instantly outraged! The seller said he had been cheated and the end-buyer said the same thing.
While the deal did finally close, the investor had to give the end-buyer a $25,000 Assignment Fee reduction and pay the closing costs of the seller. In his greed to save $5,400 the investor nearly lost the deal altogether, but managed to reduce his profit by over $29,000. This is the proverbial case of being “penny wise and pound foolish.”
While there is no exact amount of how much profit a seller will allow his buyer to make or the end-buyer will be satisfied with, we use the criteria of “If it is $15,000+, do a double closing!” so you don’t lose the deal.
Transactional Funding Ft Lauderdale Broward is used in over 87% of all double closing in the Broward wholesale market when the investor has no money to close and couldn’t get an assignment of contract.
If you are going to be wholesaling, which should be every investors’ mainstay of continuous cash flow, make sure your closing agent will allow double closings before you get too close to the closing and can’t close. By simply asking if the closing agent does “Double Closings” you should know immediately. If the Realtor or closing agent says they are illegal, get another closing agent and Realtor ASAP.
The parties to the double closing are the seller (property owner) designated as the (“A”) party, the investor designated as the (“B”) and he is both a buyer and seller in the transaction and finally the end-buyer designated as the (“C”) party.
The double closing is designated as an A – B and B – C transaction. The A – B leg can be done with one closing agent, even out of state, and the B – C can be done with the local closing agent you trust. They will generally have to have the A – B done first and the B – C later in the day if possible.
Some end-buyers will require that the investor be shown in the public record before they will close the B – C leg. While this complicates the double closing it is not generally fatal to the deal. The money for the A – B closing is no longer transactional funding but now “Extended Transactional Funding” or actually a hard money loan since the investor has to close the A – B leg days or weeks ahead of the B – C closing.
In summary, real estate investors should use transactional funding whenever necessary to legally do double closings in any of the following cities – Weston, Ft. Laud, Hollywood, Sunrise, Pembroke Pines, Miramar, Davie, Sunrise, Pompano Beach, and Deerfield Beach to mention a few cities in Broward County.
To your limitless success,