Transactional Funding South Florida Legal?


When is transactional funding South Florida Not Legal?

Is Transactional Funding South Florida Legal?



The Great Debate over whether

transactional funding South Florida

is Legal is Still Raging!


I see blog posts that ask the question, “Is transactional funding South Florida legal?” I watch the answers and they come back from other investors, Realtors and ultimately a closing agent or attorney or two.


To put the debate to rest, transactional funding South Florida is legal in all states if done properly. If done improperly, it can raise to the level of fraud. There are two ways to do transactional funding South Florida and it is very important that the reader understands what is right and what is very wrong with each method.


Before I get into the obvious debate of legality, I want to address the “silent” debate about transactional funding that 99.9% of investors don’t know and few closing agents realize. The question here is “Is transactional funding a loan or not?” The answer may seem very obvious that transactional funding is a temporary loan, but it is not in some of the sharper legal minds in the country.


The monies for transactional funding South Florida are wired into the escrow account of a closing agent to be used for the A – B or initial leg of the double closing that is anticipated. Coincidentally, the end-buyer also should have wired in his total purchase price for the closing. In the agent’s escrow account there will be twice the amount of money needed for the A – B closing.  Which money is used, the transactional funds or the end-buyer’s funds? The money is virtually indistinguishable except for the amounts wired into the account.


If the transactional funder requires loan documents to be signed by the investor, the transactional funding is definitely a loan and potentially subject to state document stamps. Some states have already ruled that even if the loan document (mortgage) is not filed in the public record, doc stamps must be purchased. This potentially means that the transactional funder and consequently the investor/borrower will have an extra cost in the transaction.


However, if the transactional funder only escrows a given amount of money and doesn’t make the “user” sign loan documents, the monies are not loaned to the investor. This tends to be the majority thinking among closing attorneys and closing agents across the country.   In fact, some attorneys using transactional funders actually leave an extra balance in their escrow accounts to cover current and future closings. Your closing agent will know whether or not to charge the investor doc stamps on the transactional funding he is using.


As to the question of whether transactional funding South Florida is legal or not, this is not a legal opinion but rather the combined responses of many attorneys – transactional funding South Florida is legal if the end-buyer’s funds aren’t used for the A – B closing or if all the parties to the transaction sign a Disclaimer Agreement before the closing.


In summary, real estate investors anywhere in the country and specifically in South Florida, should use transactional funding South Florida whenever necessary to legally do double closings in any of the following cities – Miami, Miami Shores, Hialeah, South Miami, Homestead, Doral, North Miami, North Miami Beach, Liberty City, Ft. Lauderdale, Hollywood, Sunrise, Pembroke Pines, Margate, Deerfield Beach, Weston, Plantation, West Palm Beach, Palm Beach, Wellington, Lake Worth, Boca Raton, Boynton Beach, Wellington and Delray Beach to mention a few cities.


To your limitless success,

Dave Dinkel

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