A VOD is a vital piece of the puzzle for real estate investors. Why do you need one? How can you get them legally?

With many more new entrants to real estate investing this year, and more landlords and rehabbers turning to wholesaling to diversify their strategies and bump up their incomes, VODs are becoming more in demand.

What Is A VOD?

A Verification Of Deposit (VOD) provides proof that you have access to enough funds to buy a property and close on the transaction.

It is a printed document direct from a deposit banking institution verifying how much money is in an account.

Why You Need VODs

As a real estate buyer you won’t even be able to view properties or make an offer without proving you can pay for it. The sellers and their real estate agents don’t want to waste their time unless they know for sure you can follow through.

A VOD is the perfect way to do this. It shows enough money in a bank account to cover the purchase price, closing costs, and any other requirements, like assets in reserve.

This is exactly what you need if you are wholesaling or flipping, and doing back to back closings.

Even if you are buying a home to live in, or plan to rehab and hold it, but are getting a mortgage loan, your lender will almost invariably request a VOD in the process to verify the amount of cash you said you had on your loan application.

What’s Important In A VOD?

There are four important factors when obtaining and providing a VOD.

1. It is for enough cash (purchase price, closing costs, several months of reserves)

2. It’s time sensitive: most will require it be dated within the past 30 days

3. You have it in hand before you find a property: you need to be able to make instant offers when you find a deal, and even to get in to view properties

4. It’s real: falsifying real estate and mortgage documents can carry lengthy prison sentences

VODs can become even more important when sellers and agents are concerned about the economy, market, and protecting their commissions.

To help both new and existing investors get through the post COVID-19 situation, and thrive, Best Transaction Funding is providing a special $99 offer on our VOD service. Request a VOD to get your VOD and be prepared for success!

 

Mortgage scams are far too common again. What do real estate investors need to watch out for now?

There are significant threats from mortgage scams in 2017. Some are old classics, and others are new. Investors need to educate themselves, be on the alert, and skillfully avoid them, if they are going to keep growing their finances. Here are some of the common ones to be on the lookout for today.

ID & Wire Theft

One of the biggest threats today is identity theft. This can be a result of the recent Equifax hack, or perpetrated through email phishing scams. Criminals may try to take out loans in your name, redirect funds that are supposed to go to closing, or hijack bank accounts, and clear them out. It is important to keep an eye on your money and credit, and to double verify any wire instructions, before sending money.

Upfront Fees with No Closing

Some inexperienced loan officers and bankers are just bad at processing and closing loans. Others may be making big sums by charging upfront fees, and never delivering a loan. Either way, it gets expensive fast. Make sure you are working with a lender who is a good match, and has a good ratio of applications to funded deals.

Bait & Switch

Bait and switch scams are some of the oldest, and most aggravating. Lenders reel in borrowers by underquoting them on rates and fees, and then when they know the borrower has little choice, is worn down, or will lose more money by not closing, hikes those rates and fees at the last minute. Make sure you know what the final terms are before you go to the closing.

Broker Chains

WHile not technically a scam, it can be when presented wrong. Many new sites and lenders are popping up, claiming to be direct lenders with lots of their own capital. Many simply plan to send your deal to another mortgage broker, or shop it on various crowdfunding platforms and get others to fund your deal. They may have no money to lend, and no influence in the process. This can be highly frustrating to borrowers who have to deal with many parties to get their loan underwritten, or who are given the runaround for weeks or months, before the deal falls apart.

Insurance Scams

Leading up to the foreclosure crisis forced placed insurance scams by lenders and loan servicers put many property owners into default, or cost them thousands of dollars on individual properties. With 2017’s record setting storm activity many may also be finding lenders trying to hold onto their insurance claim checks. If there are two counter signatures required for a check to be cashed, lenders may try to keep that money, and find a way to apply it to your loan, instead of providing you the funds needed for repairs. Have the lender sign first, and send you the check.

Are pre-fab homes the newest sweet spot for real estate wholesalers this holiday season?

Prefabricated properties could be one of the hottest trends and biggest profit centers for real estate investors this season. Here’s why…

Pre-fab homes, also known as modular or manufactured homes are trending again, yet are often ignored by many investors due to being misunderstood and the confusing terminology.

Mobile homes are often an ugly four letter word in the real estate and mortgage business and few want to go anywhere near them. The have many issues and lenders commonly won’t even answer inquiries about loaning on them. They are a big risk as they are so easily removed or wiped out by bad weather, and the majority of those in existence are outdated.

However, mobile homes are not the same thing as manufactured housing. Pre-fab means the majority of the construction is done in pieces off site, and then it is all put together like a Lego set on the desired site. This removes tons of construction constraints and objections by permitting authorities. More significantly it means larger profit spreads.

This niche has also been one of Warren Buffett’s favorite and longest running businesses, which is one of few which continued to perform through the crisis.

Lately, this niche has been taken to a whole new level with higher end modular apartment buildings going up in New York and even urban Downtown Seattle. Perhaps even more innovative is a new breed of 100% sustainable hybrid home from Mesocore which has residential uses here in the uses and can double as shelters, medical centers and schools in developing nations or disaster zones like Tacloban in the Philippines.

Conventional lenders like Wells Fargo are catching on to this trend and property type and are providing financing to builders, and no doubt end buyers as well. In many cases these properties could still use a better marketer who knows how to position them and highlight the advantages to end investors and buyers.

This is where property wholesalers can really cash in, especially right now, thanks to the holiday gift rush, year-end bonus season and surge to invest capital to minimize 2013 tax liabilities.

Contact Best Transaction Funding today to ask about flash funding for wholesaling these real estate deals…

A few years ago during the big boom in the housing market it was only the real pros who could get access to transactional funding and you often had to be pretty well connected to be able to take advantage of it. However, you could say that the one great thing that has come out of the recent rise in foreclosures is that transactional funding has actually become much easier to get your hands on.

Some people confuse transactional funding with hard money lenders and private mortgage lenders, however it is actually very different in some ways. No doubt everyone has learnt that hard money lenders have become far more cautious and strict on the loans they make than a couple of years ago. It used to be that providing you had a pulse and there was equity in a property that you could get a loan. Today these hard money lenders are often offering very limited LTVs and even require credit reports and proof of income and assets in many cases. This makes it a lot more like trying to jump through the hoops of a conventional mortgage lender or bank than what hard money was designed to be like.

In contrast transactional funding couldn’t be easier to get. You need to be aware that this is not a form of financing that works for those with buy and hold strategies, but it is perfect for wholesalers and those focused on flipping houses. Transactional funding is specifically for those who already have an end buyer and simply need the funds to close on the A-B transaction first.

What do you need to qualify for transactional funding? Virtually all you really need is your purchase contract and your sales contract with proof that your end buyer has been approved for a loan or has the cash to buy the property. There are no appraisals needed, no income and asset verification or credit checks. It is really that easy and you couldn’t ask for a better way to keep a steady stream of deal flowing.