Transactional Funding

[Mdhaas]

You can quote whatever esoteric code you want.  The bottom line is the 90 day flip restriction is not a real impediment to doing any deal with transactional funding.

So, it's OK to violate/circumvent the law since you don't understand it? or that you feel that they are not designed for you?

[Rastusracing]

Well Eric, my warnings about it may be nothing to you and your business, however they are a real fact of life for alot of end buyers and those that do some sort of flipping to those end buyers.

To say the code that I quote is esoteric just shows what a fool and arrogant person you are. This information is directly from HUD and was intended to show some of the real life issues that some may run into considering this is in fact FHA's rules. For you to think the whole world revolves around you again shows how small a person that you are.

I quote fact and these facts do affect the flippers out there if their buyers are using an FHA loan or other loan that follows these guidelines. Eric must have the tiger by the tail, cause his world is much different than the rest. Excuse me for pointing out something obvious that needs pointing out.

[danielhenry31]

To my knowledge, the financing transaction is only good for back to back end. Throughout the day individual approved funding is considered a loan. I have talked to a financing of small businesses I found on the Internet. They said the buyer at the end of their ability to finance the purchases and close the same day,otherwise the receiver can get the financing operation.

[kdhastedt]

You can quote whatever esoteric code you want.  The bottom line is the 90 day flip restriction is not a real impediment to doing any deal with transactional funding.

It has not been an issue in ANY transactional deal I have done, so your warnings about it are unnecessary.  That is all I am saying.

Eric

I wouldn't exactly call the FHA Handbook an "esoteric code" when dealing with an FHA property.

Keith

[eric3]

Ok, maybe using the phrase "esoteric code" seemed flippant.  Of course I follow all the rules. 

Without reading all the way back, I recall that the original post, was about whether back to back closings transactional funding was feasible.

One of the responses was that you have to be very concerned with the FHA 90 day rule.

My point was simply that the difficult part of this rule had been suspended, so the fear or concern about this rule is unfounded.  The parts that remain in force can easily be dealt with in almost any circumstance by almost any investor.  So it is not an obstacle to doing a deal.

In my opinion, that poster seemed to be discouraging the use of back to back closings as some sort of a difficult process.  I was simply trying to give the opinion that they are not really a difficult process in the real world.

If you read every paragraph and clause of these rules a new investor can easily be overwhelmed and get the impression that things are much tougher than they are.  I was trying to be encouraging to the OP.

BTW, I still think that law is esoteric.  "Esoteric" simply means understood by few...it doesn't at all indicate that it isn't important law or that somehow I think it doesn't need to be followed.  I follow it in every transaction.  But it really isn't relevant to most of my back to back deals.

Eric

[kdhastedt]

"Esoteric" simply means understood by few...it doesn't at all indicate that it isn't important law or that somehow I think it doesn't need to be followed.  I follow it in every transaction.  But it really isn't relevant to most of my back to back deals.

Yes, I have a fundamental and rudimentary understanding of the English language.   Just because one doesn't take the time to understand how and why a Federal agency works doesn't mean that that their rules/ codes are 'esoteric'.

Keith

[eric3]

[/quote]

 Just because one doesn't take the time to understand how and why a Federal agency works doesn't mean that that their rules/ codes are 'esoteric'.

[/quote]

No one said it did.  I said if few people read and understand those rules, then that makes them esoteric. 
If most people do understand them then they aren't esoteric.  Who cares?  Is this really pertinent to the subject or are you just trying to stir up an argument?

[christopher w]

Rat,

FHA suspended the anti-flipping rule for normal investors as well however I have seen that most lenders have put an overlay in place that will not allow the transaction to proceed if the new sales price is over 20% higher than the previous purchase price.

[Mdhaas]

No one said it did.  I said if few people read and understand those rules, then that makes them esoteric.
If most people do understand them then they aren't esoteric.  Who cares?  Is this really pertinent to the subject or are you just trying to stir up an argument?

I think the point that we have all been trying to make is the fact that you are advocating the violation or circumvention of the codes.   

[jTempo]

Doing transactional loans where the C party (of an ABC back to back transaction) will have an FHA backed loan absolutely does have additional complexity.  Unless the first leg (AB) of the transaction is executed within a trust, even if the 90 day rule does not apply (which depends on the specific circumstances of the transaction and  the laws applicable to it), you generally still have a title seasoning issue which is common among most C lenders.  Specifically, C lenders would like to see the investor (let's call them party B) on title before funding the C party loan.  For transactional lenders, this is a big risk to take and the smart ones avoid doing so.  Some of these issues can be addressed using a trust, but there is additional complexity around that which vary from state to state.