A short YouTube video (uploaded Aug 22, 2020) in which speaker TJ addresses wholesalers about legal issues in Texas around assignment agreements and double closings. He explains that title companies and regulators are cracking down on single-source-funded double closings and that wholesalers may be required to bring the seller-contracted funds (example: $100,000) to the first closing. TJ presents transactional funding as a cleaner alternative: lenders wire funds to the title company to close the first leg and charge a fee (typically 1–5%); he notes he pays ~3% with his providers. He advises using transactional funding to avoid legal problems, mentions it reduces profit by the fee amount, and offers mentorship/contact information at the end.
Questions this video answers
August 22, 2020.
LaTonya Johnson.
1–5% of the transaction (speaker states he pays ~3%).
House under contract for $100,000; investor pays $120,000.
Chapters
Hey, this is TJ and I wanted to come on here because I've received a question from wholesalers regarding the legalities in Texas about wholesaling. And I've seen some commonalities throughout the United States where people are title companies or the laws are changing as far as double closings and the assignment agreement. The assignment agreement, meaning you get a contract from a home buyer who is is having trouble paying their mortgage. You get the house under contract and assign the agreement to an investor. When y' all go to closing, you do what's called a double closing. And normally they only use one source of money, which is the investor's funds, in order to close both deals. Well, that's what they're cracking down on. They want a clean, clear, crisp transaction, and that includes money to fund the first part of the wholesale deal. So say, for instance, you get a house under contract for $100,000. The investor pays you 120 for the, for the deal.
You would have to bring $100,000 to closing. But there's another way, and it's called transactional funding. With transactional funding, most of those people who offer that charge anywhere From, I'd say 1 to 5%. I actually pay 3% through the people that I'm using. And if you're interested in any that just hit me below, Direct message me, get in touch with me however you. However you'd like. But with transactional funding, they'll charge you 1 to 3% of that, 1 to 5% of that hundred thousand dollars, and they wire the money to the title company, they close the first half of the deal, and then they close the second half of the deal with the investor's money. It's a lot cleaner transaction. It keeps you out of that orange UG suit. It's just much cleaner. So, I mean, yeah, it takes 3 to 5% out of your profits, but you want to do this the right way, Trust me, you don't want to go through a situation where you have legal implications because you did a double closing using an assignment agreement. So again, I just wanted to stop here and let you guys know that if you have any questions for me, please don't hesitate to answer them or ask those questions in the comments below. This is TJ with the Millenn Master class. I offer mentoring ship. I can't talk today. I offer mentorship. So if you need me, I'm available. Thanks. God bless you.
