Transaction Funding For Short Sales
Short sale transaction funding is most often used by investors who are skilled at getting bargain deals on foreclosure homes and then turning them around for a profit. Right now more people are interested in visiting this business, making it necessary to explain how and why this type of funding is secured.
Flipping real estate has become a glamorized process through television shows and media reports that show wealthy investors flipping houses and making a ton of money. In real life, it isn’t so glamorous but can be quite profitable if you know how to do it.
A short sale occurs when a homeowner, lender, and investor come to an agreement to sell a house for less than is actually owed on a loan. This is usually done because the homeowner is unable to pay the house payments and everyone wants to avoid the troubles of going through the foreclosure process.
Usually, an investor will offer to pay a nice amount of money upfront so that the bank recoups some of its money and the homeowner is off the hook and avoids foreclosure. Everyone is short changed a little, but the investor walks away with a great deal.
Of course, the investor will get their investment back as they resell the home but in many cases they will have to find a source of funding to cover the price of the home up front. Private lenders often fill that void.
The best way to find legitimate sources of short sale transaction funding is through the internet these days. Private lenders are making themselves more available through websites that advertise their willingness to work in this capacity. In fact, finding the private lenders online may be the only way to track them down as they are harder to come by than a regular bank or other public lender.