#2 Off Topic Contributor
- Real Estate Investor
- the villages, FL
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transactional lending
#2 Off Topic Contributor
- Real Estate Investor
- the villages, FL
I'd love of explanation of what this is. I may be in position to investigate this opportunity and would appreciate some info from folks that have actually been involved in it. Can it be a win-win-win for everyone and can I make some money doing it? Thanks in advance. Rich.
Most Popular Reply
Rich-
I've never lended but I have borrowed using this method.
Transactional lending is used for a double close. The double close is required when dealing with bank either in a short sale or REO. You would lend the money on the A-B transaction between the bank and the investor.
Typical lender lends at 2% of the purchase plus $250 for "paperwork". Most lenders require a minimum $2500 to do business. You would lend your money for 24-72 hours, then be repaid once the B-C side of the transaction is completed. They lend 100% of the A-B side.
My lender requires:
A-B Contract
B-C Contract
Approval letter from the bank
Insurance on the property
Once I send him that, he okays the funds to the title company. He lends with a 72 hour notice.
The promissory note is written such that I do not incur any penalites if the funds are wired back within 72 hours. After 72 hours it is 18% interest rate.