Hello To All:
If you have been investing in real estate for more than five years, and doing it actively, you will have experienced or should have experienced a whole different world in terms of funding deals, between then and now.
As much as it has been written, lenders are lending, but not easily for those who really need to fund deals. I like to call this selective funding. Todays lenders can be selective and really need to be, because the borrower landscape can not afford to suffer anymore.
The days of 100% financing are over, we all know that. The day of putting zero to five percent down are also long gone. The day of lenders funding investor deals as easily as they once did is also gone, and that is the residential sector. With the reality of commercial foreclosures looming quick, commercial deals are not going to be easily funded either. Apartment building funding is also going away, because tenants are losing jobs and rents will not be paid, thus forcing owners of apartment buildings to default or the threat exists.
There is a new funding strategy that is available, one that is really worth looking at. That strategy is called Transactional Funding. What is it and how does it work?
Transactional Funding is private money to fund a deal for one day. That is the basis of it, but there is more to it than that. Transactional Funders are wealthy private individuals and entities, that allow you to use their funds to purchase a property, with those funds being utilized for the day and then returned to them along with a fee for the use of those funds.
Here is how it works. You, mr/ms/mrs investor have a property you would like to buy, with the goal of reselling for a profit. That investment will cost you lets say $55,000.00. It is a 3 bedroom, 2 bath single family home in a nice neighborhood and the seller needs to sell now, for whatever reason.
The property has comps that attest to the fact that the value of the property as is today is $95,000.00 and it needs about $3,000.00 in work to update the property and make it more saleable.
You being a great networker, have already established a relationship with a realtor who always has clients looking to buy for the purpose of residing in a property. You put the deal under contract for the full asking price of $55,000.00 with a 30 day close.
You create a marketing sheet and fax it to the realtor. The realtor calls you the next day and tells you that they have a corporate client that needs to secure a property for a executive that is relocating to the area and is a single female. The realtor says she does not have to even look at the property, and they are prepared to offer you $75,000.00 for the property and wants to know if that is a fair offer to you.
You begin to get excited and you say well yes, that is fine. You then receive the contract and other documents needed.
In addition to establishing the realtor relationship, you have done the same thing with a transactional funder source and that funder gets the documents for the deal from you and tells you that as long as the deal can close as a double closing, they will provide all the funds including closing costs for the deal and the fee will be $2000.00 that is taken from the deal proceeds at closing.
You schedule a closing for the 30 day time frame and when it is all said and done, you bought and sold a property that cost you nothing more than earnest money at the front end, your time in getting the deal done and at the back end, you walked away from closing with $15,000.00 which is after all closing costs and fees for the transactional funder have been deducted.
Over 150,000 transactions occur monthly and it is not difficult to do a minimum of two deals per month if you work at it.
To make it work, you need a contract with a seller and a end buyer lined up that is qualified to buy from you. This is not difficult if you build relationships with people who can come to the table and close.
My company, Jimmy Balter Partners is in the business of assisting real estate investors on a national level get their deals funded. We are affiliated with a funder who is the best in the business.
For more information on our program, we can be reached via email at: jimmybaltersdesk@yahoo.com. We look forward to hearing from you.
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