Posted over 16 years ago

100% Non Owner funding for short sales and REO

Private funding for Short Sales and REOs. How is this done and is it legal??

There are two parts to this question: 1. Transaction funding, 2. Short Sale. Let me answer one at a time.

Transaction Funding is used nowadays to facilitate “double closings”. Whenever you (the investor - “B”) buys a property from a seller (”A”), and sells it on the same day (”immediately”) to an end buyer (”C”), most title companies will require you to fund your purchase transaction (”A -> B”) with funds other than the funds that are coming from your sale transaction (”B -> C”).

Because these funds are merely used to facilitate a transaction, this is commonly called “Transaction Funding”.

As such, this applies to all kinds of transactions as long as you need a “double closing”. In case your title company tells you that double closings are illegal, ask them about “consecutive closings”. But don’t worry too much about title companies. I have a good title company if you need one.

The 2nd part of the question: “Short Sale”. What is a short sale? A Short Sale occurs when you buy a property from a seller who owes more than what you’re buying the property for. This transaction requires the bank’s or lender’s approval; because they will take a hit on the money they’re owed.

Transactional funding can be used not only for short sales but also for REO’s (bank owned properties) and any other transaction that you structure with a double closing.

BTW: In some cases you can save the costs of transactional funding by structuring your transaction with only one closing. That is usually not possible on a short sale, sometimes possible on an REO, and almost always possible if you’re buying from a private seller who does not need bank approval for a discounted payoff (i.e. the seller has “equity”).

Get more short sale education, access to 100% private transaction funding to fund your short sale flips simply email me.

Realtors I know you don't like shorts sales but I think this program might help the market.

for more information on this creative transaction go to:

100% Non Owner funding for short sales and REO

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