How to Wholesale Real Estate: Transactional Funding, and Preventing Your Buyer From Going Behind Your Back

Well, hellllllooooooo there, and happy 2013 to ya!  (Better late than never, no?)

Since I last posted, I’ve up and moved across the Bay to St. Petersburg after 19 years in Tampa.  I guess you could say it was time for a change of scenery.

Anyway, I’ve got big plans for myself (and this blog) in 2013, and will be posting much more frequently now that I’m settled in to my new place. :)

To kick things off, I’ve got a brand new Reader Mail video for your viewing pleasure. In this episode, I answer a question about transactional funding, and preventing your end buyer from going behind your back.

Check it out:

If you have questions or comments, please leave them below and I’ll be happy to answer!

Later Gators!

Steph :)

P.S.
If you’ve left me a question/comment in the last month or so and I haven’t responded, it’s because my blog was broken (technical term) and I couldn’t answer questions. I finally called in a professional, and it should be fixed now. Knock on wood…

Author: Steph Davis

  1. On January 15, 2013 at 5:50pm, Brandon said...

    Hey Steph!!

    Happy 2013 to you, too! Glad to see you back posting.

    Are you going to keep doing business in Tampa, or do you plan to set up shop in St. Petersburg?

  2. On January 15, 2013 at 6:01pm, Stephani said...

    Hi Brandon- how the heck are ya?

    If something falls in my lap in Tampa I’ll do it, but I’m going to focus on learning this market and doing business mostly over here. I’m kinda lazy, and even though it’s only a half hour drive over the bridge, I like to stay close to home. :)

  3. On January 15, 2013 at 6:07pm, Pepzi said...

    Great video. Thank you :)

    • On January 15, 2013 at 6:54pm, Stephani said...

      Glad you liked it! :)

  4. On January 15, 2013 at 6:26pm, Amanda said...

    Great video, as always Steph.

    Do you know if transactional lenders will loan the earnest deposit on REO offers?

    Thank you!

    • On January 15, 2013 at 6:55pm, Stephani said...

      Hi Amanda,

      They will fund the entire purchase price plus closing costs, but you’ll need to come up with the EMD on your own.

      Take care,
      Steph

  5. On January 15, 2013 at 7:02pm, Rob said...

    Hey Steph, I have a motivated seller who owns property in another state who wish to sell the property. The problem i’m havining is trying to find an investor buyer in that area. I tried REIA clubs in that area. Any suggestions you give would help.

    • On January 15, 2013 at 9:01pm, Stephani said...

      Hi Rob,

      Where is the property located?

      • On January 16, 2013 at 8:38pm, Rob said...

        The property is located in Williamston, North Carolina.

        • On January 17, 2013 at 9:24am, Stephani said...

          Have you tried posting an ad on Craigslist? Or calling some of the “I Buy Houses” ads on CL? Look in both the real estate services and real estate for sale sections.

  6. On January 15, 2013 at 8:38pm, Anthony Caridi said...

    Hi Steph ,I got a pass word but was not able to log inn to your site to download the wholesale package . Inn addition It would a great seal of help if you could send me an outline of the talking points on the doe and do not .

    I am also concerned on the rules or laws regarding a double closing I think that title cpmpanies and lenders do not allow a double close Please let me know Thank You Tony

    • On January 15, 2013 at 9:04pm, Stephani said...

      Hi Tony,

      Not sure what wholesale package you are referring to. If you’re talking about the free contracts, you just eneter the password that’s given to you in the email and it will take you to the page where the contracts and videos are (you have to scroll down a bit to see them).

      If you have questions about the legalities of double closings in your state, I would definitely consult an attorney and run it by him/her.

      Take care,
      Steph

  7. On January 16, 2013 at 3:58am, Christopher said...

    Should a wholesaler request an earnest money deposit from an end buyer?

    • On January 16, 2013 at 9:53am, Stephani said...

      Hi Christopher,

      Yes, always. I recommend 2k at the minimum due when the contracts are signed. No exceptions.

      Take care,
      Steph

  8. On January 16, 2013 at 12:26pm, Erin Pollin said...

    Welcome back, Ms. Davis.

    Any idea how much it costs to use a transactional lender?

    Thank you.

    • On January 16, 2013 at 8:01pm, Michael said...

      I hear transactional funding is expensive, about 40% of your whole sale fee. I.E. if you are to receive 5k for your whole sale deal, expect to pay the transactional lender 2k leaving you 3k. Ouch.

    • On January 17, 2013 at 9:28am, Stephani said...

      Hi Erin,

      I’ve never used one, but here’s a link to the one I recommend that explains what the fees are:
      http://fundthiswholesaler.net/fees/
      They all vary, so you’d be best off to shop around and compare prices.

      Take care,
      Steph

  9. On January 16, 2013 at 4:46pm, Christopher said...

    Can Realtors be a source for cash buyers if they have closed deals from buyers with cash?

    • On January 17, 2013 at 9:30am, Stephani said...

      Definitely. You can do a search in the MLS for recent cash sales in the area you’re working, and then contact the selling agent who sold the property. You’ll have to compensate them, though. If you don’t want to do that, you can do some research to find out who bought the property and then find the buyers yourself. It takes a little bit of digging, but it’s a great way to find the buyers.

      • On January 22, 2013 at 6:27pm, Kaz said...

        Steph. How do you search in the MLS to find cash buyers? Would I have to be agent assistant to get access?

        • On January 22, 2013 at 7:32pm, Stephani said...

          Hi Kaz,

          If you go to my YouTube channel (http://www.youtube.com/flipthiswholesaler) there’s a video where I explain how to do it. Also check the FAQ section on this site. I think it’s posted there, too.

          Take care,
          Steph

  10. On January 16, 2013 at 8:36pm, Rob said...

    Hey Steph, the property is located in Williamston, North Carolina.

  11. On January 16, 2013 at 11:02pm, Eric Stifel said...

    Great blog. I have found a great source for transactional funding. They only charge a straight 2 pts. and will lend up to $600K per deal. They offer a bunch of useful tools and unlimited proof of funds letters too. I see you are helping a friends funding business, so you may not want this information, but I figured I would suggest it. Any one can contact me at info@sea2searei.com if they want to learn more. If it is a conflict then just don’t post this reply. Thanks

    • On January 17, 2013 at 9:31am, Stephani said...

      Thanks for the info, Eric.

  12. On January 17, 2013 at 12:27am, rob said...

    man i love your work….once i get the reo property under contract with the bank how do i close the deal with my end buyer please help

  13. On January 17, 2013 at 8:17pm, Tanisha said...

    Hi Steph, I had a question about the EMD. When you put the REO property under contract before you market to cash buyers, don’t you have to present an EMD (cashier’s) check with the REO offer?, or can you wait a few days during that time you use the $2K EMD from cash buyer? Thanks

    • On January 20, 2013 at 9:11am, Stephani said...

      Hi Tanisha,

      You can usually write a check for the earnest money deposit, and then they cash it once the offer is accepted. You can try and use your end buyer’s EMD, but you need to find them FAST (like the same day you get your offer accepted). It’s kinds tricky to pull off, so I would have a back up plan in place just in case.

      Take care,
      Steph

  14. On January 18, 2013 at 2:43pm, serge ferrer said...

    Greetings,I am an Investor Friendly Title/Closing Agent in South Florida,I am Interested in Advertising on your Website.Cordially Serge Ferrer,email:sergeferrer@hotmail.com,website:www.affordableclosing.com 305-942-8014

  15. On January 19, 2013 at 11:27pm, Christopher said...

    Can wholesalers assign contracts to buyers for properties in a different state?

    • On January 20, 2013 at 9:11am, Stephani said...

      Hi Christopher,

      Yes, you can. :)

  16. On January 21, 2013 at 4:33am, Kaz said...

    You have cleared up some misconceptions I had about marketing a deal.I have an accepted offer on HUD property. My other question(s) is if the property was showing pending already does that mean that HUD could have other offers on the property besides mine? I am waiting to have the contracts signed by them. Should I wait to start marketing? it’s been a couple days. I don’t want to burn the clock waiting on them but don’t want to market if I don’t have control. Sounds like I am in the same situation you were in.

    • On January 22, 2013 at 9:40am, Stephani said...

      Hi Kaz,

      I don’t have much experience dealing with HUD properties, but I would just be careful if you’re marketing the property before you get the signed contracts back. If the property is marked as pending, you should be fine, but you never know. Proceed with caution would be my best advice.

      Congrats on the deal, and let me know how it turns out!

      Steph

  17. On January 21, 2013 at 1:36pm, rob said...

    this is rob2 steph what up again ? i have soak up so much knowledge on wholesalen and flippin, say in my market which is the midwest ,realisticly how long at this point with mad drive and determination what would b the average time i should have a deal and and my first check just wondering

    • On January 22, 2013 at 9:42am, Stephani said...

      Hi Rob,

      It really depends on how many offers you’re making, how much marketing you’re doing, etc.

      It’s realistic to get a deal signed up in 30 days IF you’re making lots of offers and/or doing a lot of marketing.

      What type of marketing strategy do you have in place?

      • On January 22, 2013 at 11:15am, rob said...

        at this moment all bandits and a few yellow letters but soon i will try 2 speed up the pace i need your coaching i believe ,,,full coaching is how much ..nothing left out we can get deals together i got that hustle spirit

        • On January 22, 2013 at 3:26pm, Stephani said...

          Hi Rob,

          I’m not doing any one on one coaching at this time.
          I’m a coach in the Ask the Flip VIPs coaching program, however. There are 11 coaches that you get access to every monthly via live weekly coaching calls. You can get more info here:
          http://www.asktheflipvips.com

          Hope that helps!
          Steph

          • On January 22, 2013 at 4:50pm, rob said...

            i like the vip will be joining ,, steph i know a seller that want to be done with a duplex they own its valued at 70000 alreadyhey paid 20000 into it …they owe about 50000 how would i approach that deal and assign and get a fee

          • On January 22, 2013 at 6:24pm, Stephani said...

            Hi Rob,

            Here’s a video I recently posted where I walk you through the steps involved in a wholesale deal with a private seller. IT should answer your questions on how to get it done…
            http://www.flipthiswholesaler.net/2012/11/step-by-step-wholesale-deal/

            Hope that helps!
            Steph

  18. On January 22, 2013 at 10:44am, Mike Nelson said...

    Happy New Year, Steph! You chose a great topic to discuss to begin the new year. :)

    • On January 22, 2013 at 11:12am, Stephani said...

      Thanks, Mike- Happy New Year to you, too! :)

  19. On January 22, 2013 at 2:00pm, George said...

    Hi Steph, I am very interested in wholesaling Hud homes. What is the draw back between doing Hud Homes online rather than REO’s from the MLS?

  20. On February 11, 2013 at 6:17pm, Theresa said...

    Hi Steph, I’m new to wholesaling as well and this video question is one I have too. I watched your video on the transactional funding question and I can understand what you went over, yet it didn’t address the emailer’s full question: how to get the POF letter from a TF if you do not have the end buyer lined up BC you have not shown him the deal. Thanks for all you do.

  21. On February 11, 2013 at 9:59pm, Eric Stifel said...

    Just throwing it out there. I was contacted by another investor out of state who has a buyer looking for a luxury home here in FL. Interested in Palm Beach south through Miami, Orlando area or Fernandina Beach area. Upwards of 1 million dollars, and of course they want it at 65% off market value. If the right property were to come along, they may be interested in other areas in the state.

    • On February 18, 2013 at 9:41am, Stephani said...

      Hi Eric,

      Thanks for the info. I don’t normally deal with properties in that price range, but will keep my eyes open for you.

      Take care,
      Steph

  22. On February 12, 2013 at 6:47am, Theresa said...

    Thanks Steph for clarification!

    • On February 18, 2013 at 9:42am, Stephani said...

      You’re welcome!

  23. On July 01, 2013 at 12:31pm, Tim R said...

    Steph,
    So I was watching the “Marketing Your Deal To An End Buyer” Video, and I had a question. When using a transactional loan on a REO wholesale deal don’t you need to show the bank proof of funds before they accept your offer? or is an earnest money deposit enough for them at that time, until you go to closing (at which time you will have an end buyer in place and using a transactional loan, you can double close on the deal)
    Thank you
    Tim R

Post a comment

Subscribe without commenting