BiggerPockets

Hello Fent,

Your end buyer on a flip typically needs to be a cash buyer or one that has qualified with a portfolio lender. Most traditional lenders will not lend on a flip without 90 days seasoning.

Having buyers in place is your call. I can tell you most investors always seek to control the property first and foremost then go find the buyer. Also on a short sale, the approval process is typically long enough for you to market the property for a buyer. Make your offers in the name of an business entity. Check your state law, but by executing an Option Contract or a Purchasee Contract you have an "equitable interest" in the property which allows you to market it to buyers.

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It means that most transactional lenders will not accept those deals

Before you go and pick a transactional lender ask your title company if they recommend anyone. I have used a few national companies that charged me 2 points plus a $495 application fee. My title company recommended a local guy who was willing to lend for 1% and no application fee.

It might be far fetched but def worth asking!

We can provide transactional funding forup to 45 days as a result of the BofA policy. Please feel free to contact me for terms.

Not only FHA, but other lenders as well. Most buyers are cash, but we are working with a very large national bank (not BoA) establishing the protocol and procedures needed to finance C buyers. Currently we have several in underwriting awaiting approval and have rolled out a national platform for closing/transactional funding and C lending with our partners.

IMHO we will see other large lenders fall in place very soon given that this is a part of the market they have no choice but to enter with the default overhang beginning to hit again.

Dan - great advise. And if they do not know any then be wary of attempting to close a "flip" with that title company. We get referrals on a daily basis simply because the UW will not insure and/or the title co cannot get it done timely. Make sure they can actually close and insure both transactions.

Hello --I just wrote nice explaination for novice --about transactional funding process. Check other Question --form JO of NJ in this forum.

I assume that you only want to wholesale deals and make small profit.
You have two types of end buyers --An Investor ( who may be rehabber also) and an owner occupied.

To find Investor ( rehabber) --check my posting yesterday --here in BP forum under Building a Buyers List.

As far as Owner Occupied --you can have from your Realtor or Mortgage Broker who is already pre qualified for your asking price and has downpayment.

Yes-if you are planning to do this full time and make lot of money --good to have investors lined up --and also make many offers same time to buy REOs.

Only FHA requires 90 days seasoning -- however other lenders have started -- in that case you need hard money not transactional. Also read my commnents to JO ( NJ) why be better to sell to investors and make small but quick profit and do more deals per month.

If you get an Option Contract --as Ted suggetsed --make sure to record a " Notice of Option" at court house. Again read my post to JO --about option.

Some one mentioned that 30 day seasoning is waived --regradless --there are some lenders who make 30-32 days transactional funding --just more expensive.

Private Lenders and their attorneys are smart and always stay ahead of game --against new regulatuons --they will find a way to make money for them and for investors--similar to hedge funds -- in Europe and Africa --they ( investors) pay up to 5 % and 10 % per months --

I like the suggetsion about Auction --if info is provided upfront and included in auction. and also about asking attorney --for a local private lender.

For last comment - question --Everything is disclosed upfront to buyer and seller. End buyer if Investor may have hard money or cash --and knows that wholesaler makes profit -since he found and negotiated dela with Lender or Seller ( short sale) --on the other hand if end buyer is regular - Conventional or FHA,
he does not have to know what a wholesaler paid--buyer go with appraisal and asking price. Lender may or may not know -- since they are two different tarnsactions - closings. OR if they may know -- nothing they can do --thats the reality. Thats why banks agree to short sale and discount any way.

There is NEW twist to short sale --now a
day --it is suggested to BUY note from Bank ( Ledner ) at discount -- that will reduce the time involved in processing Short Sale. Lenders have so much inventory --bad loans-they will agree to sell note-- again all cash reuire.
champak shah - Georgia

This is not a new twist, many of us tried this years ago. It is just a new guru hype technique. It is a complete waste of time IMO. It will be VERY few and far between that you will be able to purchase an individual note from a lender. Maybe from a tiny local lender but never from larger lenders.
If you do find someone with bulk notes for sale who will let you cherry pick individual notes, this could work in theory.

There are a couple of companies doing this on a large scale but I have never run across any individuals who do this.

Aside from the difficulty in reading your posts, you posted as if coming from experience and knowledge. Then, when Eric points out it is not a new strategy nor does it rarely work, you come clean with the fact that you heard it on a webinar!

For all readers, please be careful when reading and taking advice from some posters. Make sure they know what they are talking about and they are not regurgitating what they heard in some webinar or silly guru bootcamp.