9-13-9 Transactional Funding - Dean Graziosi

Hello and welcome. This is Charlie Fuller, real estate coach and investor with the Dean Graziosi Real Estate Academy. I want to welcome you aboard. Today this podcast is going to be on transactional funding and how it works Real estate for many people is still the ideal way of investing and earning profits. While there are no quick and easy ways to instantly get profit, there are ways for people to earn without having the enormous funds that are usually associated with purchasing homes, lots and real estate in general. You may have heard of simultaneous closings in your comings and goings in the real estate industry and how it's helped generate income for people in the past. If you want to get into the activity, here are what you need to know about transactional funding and just how it works. Simultaneous Closings Buying and selling real estate is one of the general and probably the most common ways to make a profit. Imagine that you have found an excellent piece of real estate property that you know would fetch an excellent price in the market or which another investor or buyer is looking for. Now, if you can own the property, the implications for you are good. You get the upper hand and will be able to sell the property to the other investors who need the property in the past. One of the easiest ways to make money out of these ideal situations is to undertake simultaneous closings, which are essentially back to back deals where you purchase a property from say seller X which you turn around and immediately sell to buyer. Yes, Quick Flips and Dry Closings Simultaneous closings allow you to earn money without having to shell out your own money since the property you purchase from seller X is immediately paid for by the funds of buyer Y. This is otherwise called a quick flip and is one of the most profitable in the industry in the past since you are essentially making money on the quick flip now. These transactions, which are called dry closings, are one of the ways that the common man and woman has entered into the real estate playing field without having to bear the brunt of the capital usually needed for their real estate dealings, which could amount to as high as several million dollars depending on the type of property that you are looking into. New Requirements New requirements from the state and the federal officials have made simultaneous closings, quick flips and dry closings more difficult. Today. These transactions are not illegal. That's an important point. They are not illegal per se, but are undergoing much more scrutiny than it has faced in the past. What this means is that many title companies today no longer want to undertake the hassle of state and federal assessments and the investigations which can take quite some time and which may require more work out of the deal than is necessary for more people. The question then is what do you face with the opportunity and the problem of the simultaneous closing? Transactional funding. This is exactly where this transactional funding comes into play. Essentially, this is a type of service where investors, investors like you, are given the opportunity to use a type of loan called a bridge loan that allows you to undertake the simultaneous closing safely and with the backing of money provided by the loan. The barrier of scrutinizing federal and state agents are removed. Since you are no longer conducting what we call these dry transactions or deals where money is transferred from the buyer to you and then from you to the seller. With transactional funding and the bridge loan under it, you are already conducting valid closings that give you the opportunity to make money out of the opportunity in the form of simultaneous closing. Funding source with transactional funding programs, the investor, such as you, is essentially making use of the funds of the transactional funding company. Now, you may use a transactional funding company's name or your own title of your company, depending upon the deal that you've chosen. Now, there are fees, of course, for these types of services in using the loan. The bottom line is that since you do not actually put any money out on the table, the pros balance out the fees in the end. So the next time you're faced with an end buyer who is willing to purchase a specific type of property which you happen to know and probably most importantly, have control of, go on and make the deal through the use of the transactional funding programs. Until next time, this is Charlie.