Short sale transaction funding is most often used by investors who are skilled at getting bargain deals on foreclosure homes and then turning them around for a profit. Right now more people are interested in visiting this business, making it necessary to explain how and why this type of funding is secured.
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.
A short sale occurs when a homeowner, lender, and investor come to an agreement to sell a house for less than is actually owed on a loan. This is usually done because the homeowner is unable to pay the house payments and everyone wants to avoid the troubles of going through the foreclosure process.
In this type of deal no one gets exactly what they want, as it is more a process of negotiating what is acceptable to all parties involved. The investor offers to pay up front to make the deal happen.
In order to secure that great deal, most investors will have to find some quick funding to support their obligation to pay for the property outright. They will sell the property for a higher price and come out of it with a profit.
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.