Welcome to Cleveland real estate investor. On this podcast, you'll hear about every aspect of the real estate investment business. You will talk to your rockstar investors about their businesses, how they built them, where they came from, and where they're going. Who am I? I'm Joe Lieber and I've made millions of dollars from the real estate investment business over the last 20 years. If you're ready to hear the good and bad from a guy who's learned this business from the school of hard knocks and get educated by some bad ass entrepreneurs, then put your helmet on, strap on your chin strap. Let's ride.
(00:54): Hey, what's up guys. Thank you for tuning in. I got a good one for you today. We're going to talk about transactional funding. I'm gonna explain to you what it is, how it can help you and how can they help you make a heck of a lot more money? All right. Let's jump in. So what is transactional funding? Transactional funding is when you borrow money to close the transaction, but you already have a buyer lined up for it and it's going to sell again usually right away within 24 hours. And the reason why you would use transactional funding is because first of all, the state of Ohio does not like wholesaling. Let's be honest. They just, they don't like it. It's frowned upon. And it's always best to take things down. Take them down, close them. You buy it with cash. No one can say anything to you.
(01:46): Number two is you have to disclose your, your wholesale fee. So you have to make sure your buyer or your seller is cool with it. And I have seen some pretty big wholesale fees. I'm not a wholesaler, but I've seen big ones. I pay big wholesale fee. See, I'm a cool cat, right? I let you guys, you host those. Get away with murder with me. You know, I'm not the guy that's going to see that you're making a $15,000 assignment fee and then go renegotiate saying, Oh man, you know, I paid too much. I know you had 15 GS juice in this deal. Once we make our deal, I honor it. And I always go to closing, but not everybody's like that. And that everybody's cool. Like uncle Joe over here, people get pissed. When they see you're making 10, 15, 20 grand, there's some really big wholesale fees out there.
(02:31): I know they're maybe even bigger than that. Some of you cats are pulling. I know you are. So this is a good time where you would want to use transactional funding and then you don't have to necessarily disclose to the buyer or the seller, your profit margins, right? Because it happened so quickly. So let's take a real example. This is where you would buy a house for. Let's say you take it in contract at $50,000 and you bring a transactional funder in someone who has that you're going to borrow and you close it. But before you close it, because you're the one responsible for that 50 grand, you already have a buyer lined up, we'll say 65. So what happens is the end buyer is right there, ready to close it, but you're not going to use his money. You have to use a transactional, you have to use your own money.
(03:21): And that's what they call transactional funding. Okay? So a lot of you guys, I know you don't have an extra 60, 70, 80, a hundred K laying around, or maybe you have multiple deals going on right now. And you need, you know, three, 400, 500 GS because you closed in five deals and that can start to get serious, be a serious amount of money. So this might be a good time where you might want to use this transactional funding. Plus you can probably really make more money on the deals because you're not having to worry about your seller barking at you at the table. When he sees you're clipping a 20 K assignment, a contract fee, and I keep the state of Ohio off your back. So transactional funniest. Cool. So here's my offer to you. If you need transactional funding, I will lend for you.
(04:07): I will lend you money on your deals, you know, took it them close to transactionally fund these things. So if you need me to take something down, I'm putting that out there for you. We can talk about the cost of that, but generally it's going to cost you 1% of the amount of money you borrow. Now I will tell you, though, if you're calling me to borrow 30 or 40 grand, I'm not doing it for three or 400 bucks. It's going to be a, to me more than that, probably a minimum of a thousand dollars, which is very fair and very in line to what hell a lot of these transactional funding guys are a lot more than that. I don't do a lot of it. So I'm pretty, pretty easy and pretty cool about it. But if you need that, it'll help your business.
(04:48): Call me. I can do some of that transactional funding for you. I really do think it will help you increase revenues. And there's a lot of a lot more opportunity out there for you to really even do more deals and have more control of the assets. And then if you don't have a buyer, maybe it's something you want to take down for 30 or 60 days. So you can, you know, kind of clean it up a little bit and maybe add some value to it, to get the right buyer. Maybe even you want to use the power of the MLS that way. If you want to keep money out for a month or two and increase your margins, you might be able to use the power of the MLS. So giving it a couple of great takeaways there today for you, wholesale
(05:28): Guys, there's a lots of deals that there
(05:29): To be had. And then if you're a guy who likes to buy bank owned stuff or buy from auction, you know, being able to get, that's not what the transactional funding, it's more like private lending or hard money, but there is a possibility I could fund some of that stuff for you too. It's going to be deal specific and case by case. And really, I really only want to do Cleveland Ohio right now because I don't do a ton of it. I'm new to it. And I don't want to go start doing other States where I don't have control of the assets and, and all that stuff. But if you want to do something right here in good old C town, I will help you with that. If you want to have some conversations, there, there's no guarantees I of this stuff. I just got to think it through.
(06:07): I got to feel really comfortable. A lot of it's going to be relationship based. You know, we we've talked a few times or get to know your business a little bit and there could be some great windows there for you. I wish someone would do this for me years ago. Gosh, the things I had to go through to raise money when I even knew how or wanted to raise money and things I had to go through and the give ups and the amount of money, it costs me to raise the money. It was just ridiculous. I feel like I'm so cheap. Really. I feel like the money's really cheap. I'm not even charging what some of these guys are charging. I heard of, there's a lender up here on Rockside road in independence. And this cat's like five points, 18% plus plus plus plus admin fees plus lender fees, plus one, every dang thing covered. And he's probably right. Cause he has a hell of a lot more experience than I do, but I'm not five points and 18% tell you that. So I just think there could be some good opportunity with it. So if you have interest in that, I'm putting this out here today, just to help if you're interested in, you know, give me a shout. All right, guys, another short one today, but thank you for tuning in have a great day.
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