Transaction Funding – What it is and How to Find it

What exactly is short sale transaction funding and is it something you could take advantage of right now? As times in the real estate market change more people are becoming interested in this aspect of the business. This type of funding is usually used by investors (experienced and new) who want to purchase real estate outright for a discounted rate and the flip it for a profit.

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.

The definition of a short sale is when a home is about to be lost through foreclosure and a deal is struck for an investor to purchase the home. The lender and the homeowner have to all agree on the terms of the sale and the lender often walks out of the deal with less than they are actually owed on the loan.

How does an investor secure such a deal? They usually have to pay for the home up front in cash, which secures a return of the loan at least partially to the lender. That is more than the lender would get in foreclosure likely and the homeowner avoids foreclosure on their record.

The investor may need to find a lending source of their own to cover the money they need to pay up front for the property. This is where they often turn to private lenders to help them get the deal covered.

It used to be that finding private lenders willing to work in this capacity was hard to find unless you knew someone already in the business. Today, it is easier to find short sale transaction funding sources since more lenders are making themselves available online to more people. If you are interested in trying your hand at flipping property or even just want to snag up a short sale property to live in yourself, the Internet is your primary source for the best lending opportunities.