Transactional funding is an important tool for Massachusetts wholesalers in order to close a sale quickly and efficiently. Transactional funding is a type of short-term loan that allows wholesalers to purchase a property from a seller, close the deal, and then resell the property to a buyer. It is a fast and effective way to close a deal without having to wait for a conventional loan to be processed or wait until the buyer’s funds become available.
In order to take advantage of transactional funding, Massachusetts wholesalers must be aware of the laws and regulations that govern this type of funding. First and foremost, the Massachusetts Division of Banks requires that all transactions involving real estate must be made with the assistance of a licensed real estate broker. This means that a wholesaler will need to hire a broker to assist with the transaction. Additionally, the Division of Banks requires that all parties involved in the transaction be financially solvent and that the loan agreement include a detailed description of the terms and conditions of the loan.
Another important factor that Massachusetts wholesalers must be aware of is the amount of money that can be loaned through transactional funding. The loan amount is typically based on the appraised value of the property being purchased, as well as the creditworthiness of the purchaser. Additionally, the interest rate for the loan is typically higher than that of a conventional loan, as the lender is taking on more risk by making a loan without a long-term repayment plan.
Finally, wholesalers should be aware of the fees associated with transactional funding. These fees can include application fees, closing costs, and other miscellaneous costs. Additionally, the loan agreement may include a clause that requires the borrower to pay a penalty if the loan is paid off early.
Sound Investment
Sound investments can provide investors with a steady return of income and/or capital appreciation over time. Investors should be aware that sound investments do not always guarantee a return, and that they may lose money if the market performs poorly.
Massachusetts wholesalers need to know about performing due diligence and run the numbers to ensure the investment is sound with any funding source, including transactional funding because a deal is only as good as the investment. Let local professional investors like those at Deal Edge Properties help you locate the right property for your needs; we know the red flags to watch for and can zero in on the best property to bring the highest returns on your investment.
Hard or Private Money Lender
Hard money loans can be a great option for those looking for short-term financing for real estate transactions, but they should be used with caution. Borrowers should consider the costs and risks associated with these types of loans before taking one out.
Massachusetts wholesalers should understand that transactional funding is when a third-party investor wires the funds directly to the title company, allowing wholesalers to complete a deal and grow wealth without using their funds. You should be aware these funds cannot leave escrow. There is no credit or income check when you borrow these funds. However, you will need to have a purchase contract to confirm that the deal with your buyer is sound for the lender. Seasoned investors like the pros at Deal Edge Properties can help you locate lenders to pursue this option if necessary.
Privacy
Another thing Massachusetts wholesalers need to know about transactional funding is that by using a double closing, the details are private and unknown to your buyer and visa versa, which keeps your profits from the transactions private. And while it isn’t anyone else’s business, there are still cases where knowledge of these figures has caused emotional difficulties to arise from both sellers and buyers and ended great deals. Working with highly skilled investors, like those at Deal Edge Properties, means you can be confident that your transaction will flow smoothly.
Transactional Funding Fees
A transaction funding fee can range from 2 to 12%, which is another thing Massachusetts wholesalers need to know about transactional funding. Delays in closing can add extension fees.
Transactional funding can be a great tool for Massachusetts wholesalers, as it allows them to quickly close a sale without having to wait for a traditional loan. However, it is important to be aware of all of the laws and regulations governing this type of funding, as well as the fees associated with it. By understanding these issues, wholesalers can ensure that they are taking the right steps to close a successful transaction.
The seasoned professional investors at Deal Edge Properties are familiar with everything Massachusetts wholesalers need to know about transactional funding and are happy to help. Talk to one of our pros today, and you’ll see the difference for yourself that working with local investors who care about Massachusetts and our neighbors here makes. Save time by working with the full-service team and our network of in-house providers at Deal Edge Properties that can handle everything from locating the best investment for your needs to property management and everything in between. Helping our investors make the highest possible returns on their investments is the passion of the professional investors at Deal Edge Properties. Save money by avoiding costly mistakes because you’re working with professionals for a small fee. And don’t forget to ask about the current inventory of the best investment properties available in Massachusetts at Deal Edge Properties. Call Deal Edge Properties at (978) 274-0555.