While I've done a couple of back-to-back closings on a couple of deals, I've never done one where there was some work to be done for the end buyer to close with a conventional loan.
A-B contract to close Friday, May 9th. End buyer wishes to close B-C on or before May 30th.
Property is in need of a new HVAC and water heater to meet FHA requirements. I wanted to save money ($ 3,500 versus $9,000+) and time and do transactional funding for the deal, have the units installed over the weekend (scheduled and paid for by me) and have it inspected on the following Monday or Tuesday to satisfy the issue and close quickly. Have any of you done this or worked with transactional lenders for this type of transaction? I am currently consulting with one who will do the deal, but wanted to solicit feedback in the event that a more experienced REI had more insight (after the fact... of course; I'm already behind if I've screwed up).
I have done a deal using transactional funding but never over that length of time. No transactional lender will loan you the funds for that long of a time and if they do it will be expensive. would you be able to push the A-b to around the 28th or 29th? or will the buyer buying on the B-C be signing the purchase and sale with a non refundable deposit?
CFG does it but it is a little expensive. I may delay closing to the 16th, which should give us plenty of time and save me quite a bit. Thanks so much for the advice, @Manny Cirino !
Are you sure your buyers have FHA approval for This deal. It's usually tough to get actual approval, since they have no purchase contract with the current "owner of record". 2 appraisals will of course be required.
@Wayne Brooks you are correct, Wayne; we're funding the 2nd appraisal, to be done after A-B. It is a crazy deal but I've been assured that my lender will work with me as long as my end buyer is committed to purchase and remains qualified (I have two back-up offers as well, which is helping him a lot). I may end up pushing closing back and reverting to a straight hard money loan and closing "traditionally" with the end buyer. I don't like surprises, and I'm expecting a few already.
does the seller have a mortgage do you think you would be able to get it on terms? Lease Option/Seller Finance? This could help save you some serious cash. if the transactional lender will hold for that long I'm interested in the rates he will be charging. could you shoot out some of the figures buying on a-b, deposits etc... then b-c holding cost, sale price etc...
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