Flip This Wholesaler

Hey guys and gals!

I’ve been getting a lot of questions lately about transactional funding for REO and short sale flips, so I recorded a quick call yesterday with my friend Brian Meidam who owns Tailwind Funding (aka FundThisWholesaler.net).

Say hi to Brian (and his adorable family):

The call is about 20 minutes long, and Brian covers all the bases about what to expect when using transactional funding, how the process works, how to set up the closing, etc.  He also gives out the contact info. for the title company he recommends who will do back to back closings nationwide!

If you have any questions about transactional funding, or anything else we talked about during the call, feel free to leave a comment and either myself or Brian will answer them for ya!

***Click here to listen in on the call!***

Later Alligators!

P.S.
There is a “Funding” tab at the top of my blog with a link to Brian’s site, so if you end up needing his services down the road, you know where to find him.

P.P.S.
USA! USA! USA!

P.P.P.S.
SUCK IT, refs.

Hi Guys and Gals…

Hope you all had a fantastic weekend!

I just whipped up another Reader Mail video for your Sunday night/Monday morning viewing pleasure.

If you have further questions after watching the video, feel free to leave them in the comments section and I’ll be happy to answer them…

Enjoy!

P.S.
If you need a proof of funds letter to submit with your REO offers, you can get one for free at FundThisWholesaler.net.

P.P.S.
If you have a bajillion questions about the REO wholesaling process and want them all answered ASAP, pick up my Flip This REO! eBook today!

Hi Guys/Gals,

Sorry for the lack of posting…. I’ve kinda got a full plate at the moment.

Murphy and I are working on 2 deals together, so I spent most of the weekend trying to get those sold.  Both of the deals are REOs that we’ve been after for the last few months, and the banks finally decided to cave.    Sometimes, if we are going after the same properties, we will double-team the bank, and then when one of us gets the offer accepted, we’ll just partner on the deal 50/50.

Such is the case with these 2 deals.

I think I have a buyer for one of them, and he thinks one of his buyers is going to take the other.

I’m leaving for the Windy City bright and early tomorrow, so it would be nice to get both of them wrapped up before I leave.

I’m still waiting to hear back on a few of the offers I made last week.  Most of them either got rejected or went to highest and best.  I usually just drop out when it goes to highest and best, as I don’t like getting into bidding wars and I am never the high bidder anyway, so what’s the point?

Maybe I will start bribing the listing agents like everyone else does….You’d be surprised at some of the shenanigans that go on with these properties.

I think I’ll write a book about it someday.  I’ll call it “The MLS Mafia.”  Or something along those lines. I’m sure it would be a bestseller.

Hehe.

Speaking of bestsellers, I’ve also been busy working on my ebook, which I’m shoooting to have finished by the last week of this month.   The 25th is the tentative date that it should be ready to go.  Mark your calendars.

Oh-  in case you guys hadn’t noticed- my transactional funding site (Fund This Wholesaler.net) is up and running!  If you need short term funding for your REO and short sale deals, you can go here to get it.  You can also get a free proof of funds letter to submit with your offers.    If you have questions about how it works, check out the FAQ section for more info.

Well, that’s it for now.  Jim is giving me dirty looks as I haven’t taken him out for his morning run yet, so I gotta go..

Have a great day!

P.S.
In case you guys didn’t see my post on Facebook, I’m pleased to announce that I am now a weekly contributor on Josh Dorkin’s Bigger Pockets Blog. You can check out my very first post here.

P.P.S.
To add me as a contact on Facebook, go here.

P.P.P.S
I’m trying to catch up on emails and private messages, so if you sent me one recently, I’m not ignoring you on purpose, I’m just behind. If you have a general real estate question, please feel free to post it on the blog, as I tend to answer questions here a lot faster than via email.

P.P.P.S.
If anybody has any information about that new SIMS product, please send it my way. I was searching around ALL WEEKEND trying to get details about it.

Soooo… after taking the last 3 weeks off to work on stuff for the blog, I’m ready to get back into offer-making mode.

I’ve actually only made one offer this month, so it’s time to get my ass in gear.. I haven’t even looked at the mls in the last week.   I get automatic email notifications sent to my cell phone when new properties hit the market, but I haven’t  been opening them.  I’m sure there have been lots of price reductions and new deals that have hit the market since I’ve been away, so I will be like a kid in a candy store next time I hop on the mls.

Tomorrow, Murphy and I are heading out with a list of properties to look at.  Coincidentally, he has been on hiatus for the last 2 weeks, so we’re going to see if we can get something going before the month is over.  I guess we better hurry the hell up since there’s only 3 days left in the month.

One of my solid cash buyers just got back from a 3 week vacation out of the country and called me today to see if I had any deals for him.  He wants to buy 3 houses over the next 3 weeks, so I’m going on an offer making frenzy starting tomorrow.  There’s nothing worse than having a hot buyer (literally and figuratively, hehe) and not having any inventory….

Well, it’s 2:30 in the am, so I guess I better shove off.

Hasta Manana.

P.S.
Have you guys used oDesk yet?  I’m probably late to the party, but holy crap, I’d like to give the person who invented that site a great big hug.  Or buy them a beer.  Or both.

P.P.S
Thanks to everyone for all of the nice comments and emails about the new site.  I really appreciate the feedback, and am glad you all like the new look. 

P.P.P.S
Is there any way to change the settings on the YouTube video so it shows something other than my face when it is not playing?

P.P.P.P.S (sorry about the excessive P’s- I keep thinking of more stuff to add…)
The transactional funding site should be up sometime tomorrow.  Sorry for the delay.

6/5/2009

Of all the questions I get from readers about the mechanics of structuring and completing an REO wholesale deal, the one I get asked most frequently is how to handle the closings. I thought I would post a few of the most frequently asked questions, in hopes that it would clarify the process for you…..

Here we go…

* Can you assign an REO?

99% of the time- NO. Most banks will have a clause in their addenda that prohibits you from assigning your contract. Every bank contract that I have ever signed has been non-assignable.

* My realtor told me that simultaneous closings are illegal, is this true?

I have been told that simultaneous closings (back to back closings where the funds from the second transaction are also used to fund the first transaction) are illegal, too, but I have yet to have anyone show me the law or statute that supports this as being true. I have consulted with two real estate attorneys in Tampa, and both have told me the same thing- no, simultaneous closings are NOT illegal. Many title companies will not perform simultaneous closings, as their underwriters will not insure the transactions, but this does not make them illegal.

It may be different in other locales, but in Tampa, simultaneous closings are alive and kicking.

If you have questions or concerns about the legalities of simultaneous closings, check with a real estate attorney in your area. It’s best not to take legal advice from realtors, mortgage brokers, neighbors, Aunts, Uncles, etc (or me, for that matter). Always do your own due diligence.

*How do I find an investor friendly title company in my area who will close an REO wholesale deal?

The best way to find a good title company is to ask for a referral from someone who is actively doing REO wholesale deals in your market. That is how I found mine- I sought out the wholesalers who were doing the most volume and I asked them who they were using. Peer Title was the recommendation that I was given, and I have been with them ever since.

If you grab the Yellow Pages and start cold calling random title companies and asking them if they perform simultaneous closings- be prepared for a mountain of REJECTION. Most title companies do not do them, and many do not even know what they are. Save yourself the headache, and just ask someone who is active in your market for a referral.

* I thought that the banks make you use their title company on REO deals- how are you getting around this?

OK, here is where there seems to be A LOT of confusion..

Yes, it is true that most of the banks force you to use their title companies (and most of their title companies SUCK, btw). There is no way around this that I am aware of.

The bank’s title company is in charge of doing all of the title work and preparing all of the closing documents. Once all of this is ready, and the deal is ready to close, I let the bank’s title company (or the listing agent if I am not in contact with the title company) know that I will be signing all of the documents at my attorney’s office/title company. I then request for them to email the closing documents and wiring instructions to my title company. I tell them that my title company will do a “courtesy closing” for them, which means that they will get all of the closing documents signed and collect the funds for the purchase. Once everything is signed and funded, my title company FedExes the documents back to the bank’s title company and wires them the funds from the sale.

I do not ever try and explain to the agent or the bank’s title company that I am flipping the house on the same day via simultaneous close. This will only cause confusion. All they care about is that the deal gets closed on time, and I make sure that it does.

I have closed all but 3 of my deals in this manner and have never run into a problem doing it this way.

The key here is to have an investor friendly title company on your side who is familiar with this kind of transaction. You need to line this up BEFORE you put something under contract. If you wait until after you have a deal signed to try and coordinate all of this, you are asking for trouble. Have your exit strategy lined up FIRST!

*I’ve searched and searched, and I can not find a title company in my area who will perform a simultaneous closing. Now what?

If you are unsuccessful in finding a title company who will do a simultaneous closing, you can do a double closing instead (where you will have to bring cash to the table). You can accomplish this by using transactional funding aka “flash cash” or “flash funding” to fund the transaction between you and the bank. There will be fees associated with borrowing the money, so make sure to factor that into your numbers when you are structuring your offers.

If you are looking for a transactional funding source for your REO or short sale deals, I recommend FundThisWholesaler.net.    If you need a proof of funds letter to submit with your REO or short sale offers, you can get one @ FundThisWholesaler as well.   Click here to get a free proof of funds letter.

I hope this answers some of your questions about the mechanics of closing an REO wholesale deal. If you have further questions, or would like me to clarify anything in this post, feel free to ask.

Have a great weekend!