I'm starting here that double closing are not really ideal, so as a substitute, it's advisable to use transactional funding. Is this correct?
Also, is there a reasonable rate for transactional funds to shoot for?
unless you are not able to assign the contract to your end buyer then do double closings because it will be way cheaper than paying 2-3% on transactional funding but if you need to then go for it. Here in FL I make sure that my contract is assignable and then assign it to my buyers.
Brian I would investigate transactional funding because the rates differ greatly these folks are private lenders looking for a great rate return
there is in advanced technique called a reverse assignment that replaces the need for transactional funding
Here are the basics
Let's say you do a sandwich lease
Hundred thousand dollar house
You As the investor lease the property for 90,000 and sublease for 110,000
Barbie gets a loan for 110,000 and you sign back to the seller The agreement
That's for the name reverse the sun comes from
The benefits for all
The seller gets the house sold
The buyer gets a house purchased
You make the option fee plus any cash flow
The only glitch is the seller might not like you making that kind of money so you might need to give him some money to except his son otherwise you have two double closings
Hi @Brian Huber
Transactional funding is being used when the contract is not assignable such as with HUD, and these days many more REO's. What you may be hearing regarding double closings is not so much that they are not ideal, but that most title companies will no longer do them because they perceive risk in not having two distinct and separately funded transactions. This is definitely the case with short sales and more so these days with REO's, although not all REO's. Transactional funding rates used to be 2-3% but many have been below 2% for 3-4 years now.
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