Please note that Transactional Funding IS NOT the same thing as a hard money loan from a private lender. Many beginners, and a lot of our new students in our real estate training program confuse hard money loans and Transactional Funding.

They are NOT the same thing. A hard money loan is when you are borrowing money for the purpose of purchasing a property to fix and flip. For a hard money loan on a fix and flip you will typically be required to put down 10% to 20% of the purchase price and you will also need to have the repair money for the rehab available to fix up the house. You will also need to pay points, fees, closing costs, insurance and prepaid interest. That is NOT Transactional funding

Hard money loans are high interest rate short term bridge loans for a term of no more than 12 months. The goal is to borrow the money, buy the property, make repairs to the property (with your cash), and sell the house and pay off the hard money loan. The loan term for a hard money loan is 12 months.

We DO NOT offer our Partnership Program Students Hard Money with our Partnership Program. We DO NOT offer repair money. We DO NOT offer to partner with you on rehabs or fix and flips.

What we DO OFFER is Transactional Funding for Wholesale Flips. To learn more about my Partnership Program Click Here

Transactional funding is a same day loan for when you are wholesaling/flipping a property. In most cases when you are direct to seller, you would simply assign the contract and would not need any funding to flip the house.

But in the case of Bank Owned Properties, Fannie Mae, Freddie Mac and HUD Homes, you CANNOT ASSIGN these because the bank will not let you use an assignable contract. So the only way to flip these is to do a double closing. Instead of assigning the contract you are DOUBLE CLOSING meaning you are first buying the house (and paying for it) and then you are selling the house for a profit. For a double closing, it’s very important that both the purchase of the property and the resale of the property both occur on the same day. in order for your deal to be funded by us, both closings MUST BE on the same day at the same Title Company (Independence Title).

The issue with double closing, is that if you have to first buy the property before you can flip it, how are you going to pay for it if you don’t have the cash? That is where transactional funding comes in. The purpose of transactional funding is for you to have a way to pay for the property before we wholesale/flip it to another investor. We can do the transactional funding for you but in order for us to fund your deal, your first and your second closing MUST BOTH be on the same day and they must both be at Independence Title

We will only fund the first closing when your second closing documents have been signed by the end buyer and the end buyer has funded (they have sent the wire for closing and Independence Title has received their wire). Remember that both closings MUST happen at the same title company (Independence Title).

The purpose of Transactional Funding for our Partnership Program Students is that WE CAN FUND YOUR DEALS ON DOUBLE CLOSINGS so you don’t have to come up with the money to pay for the purchase of the house. There are some exceptions though (listed below).

We won’t fund your deal if you don’t use the Title Company that we recommend (Independence Title www.titlerate.com) Tel (954) 335-9305
WE ONLY FUND DEALS IN THE STATE OF FLORIDA.
We won’t fund your deal if the second closing is not signed and funded BEFORE we fund the first deal (no exceptions).
We won’t fund your deal if both closings are not signed and funded on the same day (no exceptions)
We won’t fund your deal if we cannot physically see the property to make sure we are okay with the property condition.
We won’t fund mid & high end flips. Our investors are looking for entry level homes. That is what we fund. Please check with us first. Our proof of funds letter is valid up to $300,000.
We reserve to choose not to fund a deal if we think the price is too high, do not like the property, think it’s a bad deal, if their are issues with the property or for any other reason that we choose. We reserve the right to say no.
Transactional funding rates are subject to change at any time. Higher priced deals will require higher fees since there is more risk. We don’t like funding deals over a certain price limit and may have to refer those deals to a third party transactional funding company. We cannot guarantee or quote the rates for third party transactional funding companies. Rates vary by the deal, the price, the repairs and the risk and parameters of each deal.
If you are wholesaling a property and you have a signed contract and are wholesaling the property to an end cash buyer, then if you don’t have the cash in your account to fund the buy, you might need to use our Transactional Funding. Transactional funding is perfect for bank owned properties, properties from online auctions sites and short sales (with no deed restrictions) that you are wholesaling to an end buyer. Remember on short sales to make sure there are no deed restrictions since you can’t flip those. In order to make sure we have no issues, we make sure that there is a free and clear marketable title and we do not fund anything with open or expired permits, any open liens, code enforcement violations or building violations.

Please note that it is a lot easier to assign a contract that it is to schedule a double closing. The only reason to double close is because you cannot assign the contract. Because banks do not allow assignable contracts on bank owned properties, the only way you can wholesale/flip these bank owned properties is to schedule a double closing (two closings). That means you have to pay the closing costs to purchase the property before you can sell the property to someone else. And the title company needs to know what they are doing (which is why we insist on using our title company for the transaction to make sure that everything goes smoothly).

In order to purchase the property from the bank (or seller) for the first closing you will need to have a source of funds to pay for the purchase. This is where Transactional Funding (also known as same day funds) is needed. I use my own personal funds for Transactional Funding to all of our students in our Partnership Program and Real Estate Coaching programs for deals located anywhere in the State of Florida. We ONLY Fund deals in Florida and do not fund deals in other States. We will not fund your deal if you are not a current active member of our real estate training program.

If you have a deal that needs transactional funding, please submit all of the details of the deal including the purchase and sale contract for both sides (AB closing and BC Closing), proof of deposits for both sides and any title work that has already been completed to us. Remember that you must use our title company Independence Title for BOTH closings. Please note that we need at least 3 weeks prior to the closing date to prepare your file. Please scan and send all documents via email to support@lexrealestategroup.com.

In order to ensure that your deal can be funded we need to review it and make sure that it meets our funding criteria. We absolutely DO NOT GUARANTEE that we will fund your deal and we reserve the right to not fund any deal that we don’t want to fund (for any reason).

In the State of Florida, the preferred title company is Independence Title

How Transactional Funding Works
If you have a signed contract and we are wholesaling your deal to an end buyer, then if you are short of cash, you might need transactional funding. Transactional funding is perfect for bank owned properties that you are flipping to an end buyer (since banks do not allow assignable contracts).

Double Closing
We are going to need to schedule a double closing with the end buyer. Double closings, also known as simultaneous closings, allow us to schedule two back-to-back closings for the same property on the same day. To flip a property and to pay for the first closing, you will need to have a source of funds to pay for the first transaction. This is where transactional funding is needed.

If you have a deal in the State of Florida that needs transactional funding, then we can fund your transaction if you submit it to us via our Partnership Program. However, for us to fund your transaction we need to review it and make sure that it meets the following criteria:

You must use our preferred Title Company (Independence Title) for both closings. It is much easier to coordinate a double closing if both closing are at the same title company.

Our preferred title company for the State of Florida:

Independence Title

4700 W Prospect Rd #115, Fort Lauderdale, FL 33309 Tel: (954) 335-9305 www.titlerate.com

How Does Transactional Funding Work?
If you are looking to flip a bank owned property, then there will be two contracts and two closings. The first contract is between the bank (seller) and you (buyer). The second contract is between you (seller) and our end buyer (buyer). The end buyer is the person that will ultimately be the one that is paying cash and closing on the property. Please note that you are the buyer on the first contract, and you are the seller on the second contract.

Example of Transactional Funding

– Bank
– You
– Our End Buyer
You have a purchase contract with the bank to purchase a bank owned property at $190,000 (first contract). This is known as the A-B transaction.

We market this property to our cash buyers, and we find a buyer at $220,000. We send a contract to our cash buyer with you being the seller and them being the buyer (second contract). This is known as the B-C transaction. This is why we recommend that you use a Florida Land Trust for the buyer’s name as the buyer on the first transaction.

Please note there are two different contracts at this point. The first one is the AB contract between you and the seller. The second contract is between you and the end buyer. That is why it is called a double closing because there are two contracts and two separate closings.

The difference between the two contracts, $220,000 and $190,000, is the gross profit of $30,000, but we must deduct both closing costs from the first and the second closing, and we also must deduct the transactional funding fees to calculate the net profit. This can result in a lot of our profit being wiped out by fees and closing costs. For this reason, we always recommend to our students that they make offers using land trusts to avoid paying double closing costs since we can assign the land trust to the end buyer.

Using a Land Trust gives you the option of changing the beneficial interest in the land trust. We will do this for you. If your buyers name on the contract was 123 Main St Land Trust, then you can simply assign the beneficial interest in the land trust to a new buyer and avoid paying double closing costs. This is our preferred method of closing to increase profits as much as possible.

Double Closing Costs
If we are double closing, then since there are two contracts there are two closings. This means we will pay closing costs for the purchase and for the sale. So that means that we must pay for both closings, and those closing costs can really add up. If we do double close one way to reduce this cost if you are wholesaling the property is for us to put in the contract to the end buyer “buyer pays all closing costs including acquisition costs”.

Fees for Transactional Funding
The transactional funding fee is 2%. There is also a $495 transaction fee. The minimum funding fee is $3,000. We only provide Transactional Funding for deals that are in the State of Florida and only with our approved title company which is Independence Title.

As an example, if you had a deal that required funding (in the State of Florida) and you were to request us to fund your $150,000 purchase, then your fee would be 2% of that amount which is $3,000 plus the $495 transaction fee for a total funding fee of $3,495. Since we are splitting the deal, we would be splitting the transactional funding fee so half of that amount would come out of each of our share of the profit.

Please remember that transactional funding fees are not related to closing costs. Closing costs are what the title company will charge to close the transaction and are not related to transactional funding fees. Also please note that we are not related to, nor have any ownership interest in the title company and the closing costs that they charge have nothing to do with us.

Once we add the transactional funding fee and the closing costs, this can significantly cut into the profit on the deal. That is why we like to make offers in land trusts to keep the profit as high as possible.

Both Closings at Our Title Company
Please note that we will not fund your deal if you cannot have both closings at our preferred title company. We will also not fund your deal until the end buyer on the B to C contract has signed their closing documents and wired their funds. We need to know if it’s a done deal before we send our wire.

Wholesaling/Flipping the Property
When you have an executed contract, submit your deal to us immediately by using www.submitmydeals.com. The only approved method of submitting your deal to us is by using the link above. Do not email your deal to us. Use the link above. The sooner you submit your deal to use, the sooner we can start marketing it to our cash investors.

If we find a buyer for your deal, then we split the profits from the deal 50/50 after all closing costs and transactional funding fees.

Sending Your Deposit to The Title Company
Do not send your deposit into the title company unless we tell you to. Do not send your contract to the title company either. We will handle and coordinate the transaction for you. If we find a buyer, we will let you know once we have a signed contract and we will tell you when to send your wire for the escrow deposit.

What Are Our Buyers Looking For?
Our buyers are rehabbers that are looking for houses to fix and flip or landlords that are looking for cash flowing rental properties.

Demand from buyers is strong at the lowest price points of the housing market. Our buyers are looking for cheap houses that have a good profit margin with a substantial difference between the ARV and their purchase price. The higher the price of the property, the less demand from cash buyers and the less likelihood of you having your deal funded. Stick with the entry level priced homes for your target market city since that is where the buyer demand is the strongest. Our buyers want cheap houses to fix and flip or to keep as rentals. They are not looking for high priced homes.

Which Areas Are in Demand in Florida
We have strong demand for houses anywhere in the State of Florida. If It’s a good wholesale deal at a good price, then we have buyers that are interested. If the house could be a good fix and flip or a good rental and it has equity then we have rehabbers and landlords that would be interested in buying the property.