We have done several wholesale deals in Georgia. We usually use the funds from the buyer to close the transaction. This is usually called Pass Through funding and avoids the use of transactional funding .
While several closing attorneys do it here in Georgia , i heard its not allowed in Florida .
Does anybody know in which States this type of transaction would be possible ?
In particular , I was wondering about Alabama , Mississippi and Luisiana but would be curious if there is other States as well.
In general it is good idea to use transactional funding; as few title companies and under writers are not comfortable doing pass through or assignment of contract. If your share being in middle exceeeds 5% of the sale (say over $3500 minimum profit for smaller deals) ; then it makes more sense to use transactional funding to make everyone comfortable.
Imagine you day trade a stock; if you buy then sell for profit; no one is worried. If you do sell without actually buying; that is grey area. Say the broker took the profit in the middle without owning the share; it is not good feeling. The same has to be treated in real estate too.
Disclaimer: This is not a legal advice. Purely entertainment value.