Extended Transactional Funding
2-35 Day Extended Transactional Funding
Investor Funding Alternatives provides equity capital for up to 35 days in Extended Transactional Funding. This funding is appropriate for transactions that require a holding period before title can be transferred to an end-buyer, when the end-buyer is approved (or a cash buyer) and is financially committed to purchase.
Fees:
$395 non-refundable Processing Fee, only after initial file review.
* Transaction Fees (paid from the second closing):
Amounts to $500,000 ($1 Million – case by case)
| Holding Period | Profit Allocation to IFA (% of IFA Capital Contribution) | ||
|---|---|---|---|
| 2-5 Days | 2.75% | ||
| 6-10 Days | 3.75% | ||
| 11-15 Days | 4.00% | ||
| 16-25 Days | 4.75% | ||
| 26-35 Days | 5.50% | ||
| 36-45 Days | 7.00% | ||
| 46-60 Days | 9.50% | ||
| Over 60 Days | 14.00% |
$300.00 Administration Fee on all funded transactions (paid from the second closing).
*Minimum Fee $3,000
Extended Term Guidelines:
1. The spread between the A-B purchase and the B-C resale price should be 15%, as a general guideline. This guideline can change depending the purchase price and on factors such as the amount of earnest money, profit margin, and fair market value.
2. The funding percentage of actual value should be near or below 80%. The Investor can contribute funds to achieve this guideline.
3. Earnest Money Deposit should be encouraged to be equal the down payment requirement of the C Buyers lender and should be in escrow as a “Non-Refundable Security Deposit”, rather than Earnest Money. Larger non-refundable deposits help contribute to us approving your transaction. Minimum non-refundable security deposits should be 5.0% for conventional and 3.5% for FHA financing.
4. All C-buyer financing conditions must be cleared with the exception of an updated Preliminary Title Report and possibly an appraisal.
Items Needed:
5. Completed Transaction Intake Form with all documents listed on the form.
6. Submission of documents required in our File Submission Checklist.
7. Executed Client Application Form for your first transaction.
** MS Word 2007 (or higher) is required to view these forms.
After all information is submitted, funding can typically occur within (5) business days.
Prior to funding the A-B purchase the C Buyer must execute an Addendum to the contract verifying that no contract contingencies remain, and if they fail to close within the contract date the Security Deposit is to be released without additional signatures.
Insurance must be paid prior to or at closing for a minimum of three months naming us or our partners as Additional Insured with a maximum deductible of $1,000.
If your transaction is ready (with a C end-buyer under contract), please submit a Transaction Intake Form now to start the process. Please specify how many days you anticipate needing funding for.