Transactional funding is nothing but the method available for supplying the money for investors mainly for purchasing the property which is actually resold to end-buyer. This money is used just for a day for less than that since the investor closes with that seller and after that by end of the day even buyer will close. There are many best transaction funding methods available today.
How it works?
The process of funding actually starts when the investor gets the property under a contact and this is from a seller. The property can be a multi-family home or single-family home. But there is a key behind this transaction and that is nothing,but investor doesn’t have money for closing the purchase with that seller. Here comes the concept of best transaction funding.
There is one more reason. That is investor may have the intension to cover or hide the actual profit from his end-buyer or from original seller. He may have intension behind that these sellers and buyers should never come to know how large his profit is. Once the investor finds the buyer, then only he can think of closing the purchase with seller. Later he can sell the property to the actual end-buyer and get some profit.
Lenders who are selling REOs and even short sales never allow these investors for assigning the contract. This may require name change and no lender will agree for this. There is one more reason behind not using the assignments. This will not be agreed either by seller or by their listing agents and attorney. One more thing is, in case if the profit for the investor is really huge which is given by seller or the end-buyer then either of the party will not be ready to close. In case if the net profit is over $10,000 then the cost behind transaction funding for that double closing will be inexpensive when. This is really less when compared to loss of deal in case both buyer and seller do not close.
A, B, C letters and Real Estate Closings
These letters are mostly used in real estate for referring double closing. Here the letter A is mostly used for original property and B is used for investor. The letter is used for end-buyer. Hence with these letters they can represent the closing which happens between them. A-B and B-C is nothing, but the term used for double closing and these are two double transactions.