Salt Lake City, UT (PRWEB) July 25, 2013
Transactional funding is causing a lot of buzz among real estate investors because it's a way that allows them to continue to flip deals without dealing with banks. Foreclosure University, who is one of the leading online authorities on foreclosures, announced that they will be providing transactional funding to all investors who are needing funds for quick flips.
Transactional funding is becoming more and more popular as banks slowly stop lending and tighten their lending standards. "If forces investors to look for other creative ways to fund their deals," says Jacob Staley a spokesman for Foreclosure University. "We are simply providing that solution and investors can get back to business."
Back in the day, investors that were flipping houses or more commonly known as wholesaling, would use the end buyers money to fund their transaction with the bank. This all happened simultaneously. Today, banks and title companies want to see 2 separate transactions on any wholesale deal. No deal will fund unless there are 2 separate and independent transactions. This means the investor must show proof they have money to purchase the property.
This is where transactional funding comes in for investors. They needed a way to get money of their own, for a short period of time, to fund the first transactional between them and the seller. Once they purchased the property from the seller, they could turn around immediately after and sell it to their end buyer. This was a quick solution for them and why it has become increasing popular over the years.
There are several reasons why investors have turned to transactional funding. One of the biggest reasons is the credit and income factor. Even investors were not immune to the down turn of the market. Like many, they also got caught in all the excitement. The good news is that this is a viable way to fund a deal quickly without needing to worry about verifying income or credit.
"It's one of the only ways out there where we don't care what the investors credit looks like. We don't even care if they have a job. As long as they have an end buyer in place, we can fund the deal and everyone wins," says Jacob.
Transactional funding can be used on all quick flips. Doesn't matter if it's REO's, short sales, commercial or residential. According to Jacob, as long as there is an end buyer, the deal can be funding. The funds are not used for rehab projects or anything that is a long term.
They do offer extending term funding which means they will fund deals longer than a day, however, the funds are strictly for flips.
Typical fees for using transactional funds vary depending on how long the money is tied up, the amount of risk involved and how much is required. Same day transactions start at 2%. For most real estate deals, back to back closings are the way to go and what most investors shoot for.
For those who would like more information on transactional funding or who are looking for a funding partner can visit Foreclosure University for more details.