With Pass-Through Funding and “Blind HUD’s” off the table, it’s the only game in town that makes sense.


Later or now

NC Investors and Wholesalers - Time to adjust your tactics

April 2021 saw the closing out of pass-through funding in North Carolina on double closing transactions. Also, the law stipulates that every double-closing deal must include a 2nd attorney. So, in short, you can no longer use the funds from your end buyer (i.e., the BC transactional part) to fund your investment ( i.e., the AB part). And that’s only the half of it:

  •  The new NC law prescribes that in any assignment-of-document process, all parties must sign off on it. In other words, it lets the seller and the end buyer know the wholesaler’s profit in the transaction.
  • It also means saying goodbye to “blind HUDs” for assignments, commonly deployed to get around a double close; NC has outlawed those as well.

It’s time to give a big hello - an open-arms welcome - to transactional lending. That’s if you want a cost-effective strategy that successfully prevents the seller and the end-buyer from knowing about each other’s participation in the transaction. 

  • All perfectly legal and above-board in North Carolina.
  • Keeping your transactional profit as the wholesaler confidential to one person, and one person only - you!.

How does transactional funding work to your advantage?

Our transactional funding is a focused short-term financing program to help wholesalers close deals in as little as one day. Any investor involved in back-to-back closings will find this methodology as the way to go in light of North Carolina erasing pass-through transactions in the real estate markets. The crucial thing is that we achieve all the things the pass-through technique did but staying perfectly compliant with the new NC regulations.

The things you need to know about transactional funding in North Carolina

As transactional lenders, we will advance the funds as long as we are satisfied that a legitimate end buyer is willing and able to buy the real estate in question. Once we’re past that:

  • There's no risk.
    • If, for any reason, the deal implodes, there are no penalties or fees.
    • Also, there's no investor money in the mix. We take on 100% of the funds involved in getting the deal closed.
  • Generally, with traditional borrowing, the wholesaler's FICO scores and creditworthiness kicks in as loan deciders. Not in this case.
  • As lenders we require sight of the basic contract details, proof of identity, and funds.
  • Timing is a critical consideration. Transactional loans are fast processes. These days, twenty-four hour transactions are in the wholesalers’ sweetspot.
  • It will cost only 1% of the loan value, deducted from the wholesaler's profits.

Why us - Wholesalers Transactional Funding - in North Carolina?

We've been in your shoes countless times. Hundreds of properties - flipping, wholesaling, buying rental properties, seller finance, and creative exit strategies. We've covered every corner of the marketplace since 2014. We know that trading in real estate sometimes depends on split-second decisions. Almost always, if a sure deal falls through, it's the process that lets you down. We've literally had sellers and buyers walk out of a closing due to our assignment fee. That would have been a perfect time to have used Transactional Funding. That or the closing costs ate up so much of your profits it wasn't worth the trouble in the end.

We launched Wholesalers Transactional Funding to close the gaps everywhere in the US and now in North Carolina to make life easy for you. We've built a model that protects transactional confidentiality and doesn't slam your bottom line. We believe we are leaders in this space because we immerse ourselves in the industry. Our proposition delivers the quickest route to a fast close. Finally, we have connections to a reputable law NC firm specializing in double closings for wholesalers that has got the job done for us many times

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A typical case study

So let's look at the process step-by-step with an example:

  1. The wholesaler enters into a contract to buy a single-family home from the original seller (let's call him A) for $300,000 - Part 1 of the transaction.
  2. The end buyer (call her C) signs a contract to buy the wholesaler's property for $350,000 on the same day as Part 1 (i.e., Part 2 of the transaction).
  3. The wholesaler delivers a BC contract signed by C (the end buyer) to the transactional lender.
  4. On the day of settlement, the transactional lender lends the funds to the wholesaler to pay A.
  5. Immediately after completing Part 1 (of the two-part transaction), the wholesaler closes Part 2 and collects C's money.
  6. C's payment pays back the transactional lender’s fee. The balance goes to the wholesaler's bank account as the realized profit.
  7. It may look like a complicated procedure, yet it's quite simple. A closing entity (e.g., an attorney or title company) is generally the middle entity acting for the wholesaler in Part 1 and Part 2 of the entire deal. They deal directly with the lender, the original seller, and the end buyer - removing the wholesaler from the heavy lifting.
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