Parcel Funders

FAQ

We've put together some frequently asked questions to provide you more information about Parcel Funders and the services we offer. If you need further help, please contact us.

General

What is a direct funder?
A direct funder funds transactions from their own private capital. Meaning there isn’t a 3rd party (broker/middleman) involved with your transaction, reducing your out of pockets cost. Direct funders also approve all loans internally allowing for a quick closing. Parcel Funders is a direct funder.
How quickly can you close and fund my land deal?
We can usually underwrite and fund a land deal within 48 hours or less.
Where do you fund land deals?

We fund land deals nationwide (50 states and D.C.).

What's your funding criteria?

Depending on the property, price, and location, we'll consider land deals that do not fit this criteria.


Property Type: Beachfront, Commercial, Farm, Horse, Hunting, Lakefront, Ranch, Recreational, Residential, Riverfront, Timberland, Undeveloped, Waterfront
Location: United States
Lot Size: 5,000 SF or Larger
Legal Access: Yes
Wetlands: Yes
Floodplain: Yes
Max Funding Amount: $1M (No Minimum)
Purchase Price: 50% or Less of Market Value
Sale Time: 12 Months or Less
Sale Terms: Cash/Seller Financing
Do I have to pass a credit and background check?

We don't run credit or background checks on our investors as a prerequisite to offering transactional or joint venture funding.

Do you have minimum and maximum funding amounts?

We don't have a minimum funding amount and we have a maximum amount of $1,000,000.

Do you offer a proof of funds letter?

We offer a free Proof of Funds letter to our investors on bank letterhead. Please contact us and we'll email you the letter in PDF format for your specific property.

How quickly do you provide a funding decision?
We'll review your deal within 24 hours, but it's usually within the same day. After our initial review, we'll reach out to you with any questions and next steps.
Do you provide funding for multiple properties as one transaction?

Yes, we can fund multiple parcels at one time and we're okay with selling them separately.

How much funding can I request and how often can I request it?
We can fund up to $1,000,000 and there are no limitations to the number of deals that you can do through us. If your land investment meets our general requirements, we'll fund it for you. However, transactions over $250,000 are given special consideration and handled on a case-by-case basis.
Do you provide funds for option, down payment, or earnest money?

Generally, we'll fund option payments, down payments, and earnest money, but each deal will be handled on a case-by-case basis.

Will my personal and deal information remain private?

While other funders may openly share information about the deals they have funded, we absolutely do not. Our funding agreement includes non-disclosure language that bars us from discussing your deal with anyone else.

Do I need to come into your office to sign papers?

No. We’ve fine-tuned our process so you can request funds through our online service. We make it fast and simple to use and all signatures can be completely through digital signature, fax or by printing, signing, and then scanning and emailing the forms back to us.

Do I have to use a title attorney or company?

Yes, we require each deal to go through a title company or title attorney and that the same one be used on both the buy and sale side of the transaction.

Do I need to have the property under contract before I request funding?

Yes, we require that you have a signed purchase and sales agreement (PSA) prior to requesting funding for a land deal.

Do you fund other property types besides land?

Yes, but it's on a case-by-case basis.

Do you have any income requirements?

We don't have income requirements for our investors as we're an asset-based funder.

Do I need land investment experience to receive funding?

It's helpful if you under the basics of land investing, but we do fund new land investors without having done a deal.

Am I expected to cover the closing costs?

No, we cover all closing costs so the investor doesn't have to come out of pocket for any fees related to the purchase and sale of the property.

Do you require an appraisal?

No, an appraisal is not required. We will underwrite your deal in-house and get you a funding commitment within 48 hours.

Transactional Funding

What is transactional funding?

Transactional funding is a method of supplying money for an investor’s purchase of a property which has already been resold to an end-buyer. The money is usually used for less than a complete day as the investor closes with the seller and later in the day his end-buyer closes.

What is a double closing?

A double closing is defined as the closing of the purchase and sale of a property twice in the same day. The end-buyer can close first or second, but the original seller must close the same day to be able to use transactional funding. If the A – B “leg” closes on one day and the B – C leg closes another day, “extended” transactional funding is required. This extended use of the money will often be a hard money loan and will usually need a mortgage and note to secure the lender’s money.

How does transactional funding work?
Step 1: Investor/Buyer B signs agreement to buy property from Seller A for $30,000.

Step 2: Buyer C signs an agreement to purchase the property from Investor B for $50,000, typically closing on the same day Investor B is buying from Seller A.

Step 3: The closing agent confirms that its office has received Buyer C’s funds for C’s purchase from Investor B. The closing agent then gives Parcel Funders transactional funding approval.

Step 4: Parcel Funders wires total of funds needed for Investor B’s purchase. Investor B uses funds to buy property from Seller A. Shortly after, Investor B sells the property to Buyer C.

Step 5: Investor B uses the money from the sale to pay back Parcel Funder and funding fee and keeps the remaining money as profit.
When is transactional funding needed?
Our investors use our transactional funding service for three basic reasons:

1. They have a contract that is not assignable to a third party. This is typical when purchasing land off the MLS, bank owned properties, or properties owned by government entities (HUD, FHA, Fannie Mae, etc.).
2. The investor is choosing not to assign the contract in order to maximize their wholesale markup. Many times end buyers will not purchase a property if the assignment fee is too high. You do not have to disclose your contract details to the end buyer when you utilize transactional funding.
3. The investor needs to stay in compliance with state laws that do not allow assignment of contracts..
What are your transactional funding fees?

We charge 3% of the acquisition price of the property ($3,000 minimum fee), and there are no upfront or additional fees if the transaction does not close charged by us. In addition, we require you to pay for Lender's Title Insurance and a Lender's Closure Protection Letter. These are standard lender fees.

What's required for transactional funding?

We require the following documents from all principals of the borrower: the A to B Contract, the B to C Contract, government ID, closing firm details (contact name, phone, and email) and if applicable, corporate documents (operating agreement, articles of organization, and EIN letter). In addition, if the C Buyer (end buyer) is getting a loan to purchase the property, please send all lender information (contact name, phone, email, pre-approval letter, term sheet, short sale approval letter, HUD/REO acceptance letter, etc.). If you're buying in a trust, we'll need the the Agreement and Declaration of the trust, the Appointment of Trustee, Assignment of Beneficial Interest, the Affidavit of Trust, and the Deed to Trustee. We are the last money in and the first money out. Therefore, we fund once we have confirmed both sides have signed and the end buyer's funds have been placed with the title attorney or company.

Do I have to close with the same closing office?

We require both the A-B and the B-C transactions occur at the same title attorney or title company. Some exceptions are possible, so please discuss your specific situation with us if you'd like the transactions to close at different offices.

What if the C buyer changes their mind and doesn't close?
While this doesn’t happen very often, it is always a threat. If the end-buyer decides not to close, the end-buyer risks their earnest money deposit (EMD). The result is the investor will also likely lose their EMD. The investor may also lose the deal unless the transactional funder is willing to “convert” the closed A – B transaction to a joint venture transaction. The best way to head-off this undesirable possibility is to have the closing agent, and yourself, stay in touch with your end-buyer to alert him/her to what is happening and how soon he/she needs to be ready to wire their money. Also, a good preventative measure is to get the end-buyer a Preliminary HUD-1 Closing Statement at least a few days before closing.
Will you fund the B-C closing?
No. We only fund you, the B investor, for the A-B closing. Your end buyer for the B-C closing must have pre-approval for financing from a certified lender or provide proof of funds if he/she is a cash buyer.

Joint Venture Funding

What is joint venture funding?
Joint venture funding is when a real estate investor approaches an individual or company to fund the purchase of a property. Each of the parties retain their existing business identities and they work together to acquire a property. Each party has their own set of responsibilities and how they are assigned depends largely on their expertise, resources, and experience. The profits vary depending on the agreement made between the individual entities, which is based upon their relative contributions.
Do you have a joint venture deal example?
One of our land investors reached out to us with their due diligence info on a property they had under contract. The purchase was around $9,000. We took less than a day to review the deal and replied back to the investor with our approval. We signed a joint venture funding agreement (investor and Parcel Funders) and then the investor reached out to the title company via email and cc'd us on it. The title company sent over the wire info and we verified it over the phone. Then, we wired the funds for the acquisition amount and title costs. After closing on the deal, Parcel Funders was recorded on the deed and both the investor and us were given digital and hard copy copies of all the paperwork from the title company. Then, the land investor started marketing the property to sell. Within two months, the land investor reached out to us and let us know that we received an offer on the property and we agreed to move forward with the offer. At that point, we signed any necessary paperwork via DocuSign and then we shared this contract with the same title company. The title company received our profit percentage split and they disbursed the funds according to our ownership percentages at time of closing. We sold the property for around $24,000 and netted around $13,000. Parcel Funders received 35% of the $13,000 and the investor took 65% of the $13,000.
What is the difference between a partnership and a joint venture?
A partnership involves the formation of a new, shared legal entity, whereas parties in a joint venture can retain their separate legal status.
Do you have a minimum land market value for funding?

The property has to be worth at least $10,000 for us to consider funding the land deal.

What's your minimum profit margin for land funding?

We require a minimum net profit of $7,500 for us to consider funding the land deal.

How long do I have to sell the parcel of land?

You will have 12 months to sell the property. In the event that you are unable to market and obtain a buyer for the property during this time, then we shall have the right to either sell the property or sell through any third party without paying you any portion of the net profit from the deal.

Are you willing to fund seller financing deals?

Yes, we're willing to sell the property on terms, but 100% of the money paid by the buyer for the property must be paid to Parcel Funders until the cost of acquiring the property is satisfied. This includes the original purchase price, property owner’s association dues, property taxes, property liens, closing costs, and any other costs related to purchasing the property. Parcel Funders will be recapitalized within six  months or less of the acquisition settlement date. Then, we and the investor will divide the net proceeds of sale according to our agreed upon profit split percentage.

Do you provide funding for marketing to off market sellers?

Depending on the length and success rate of our funding relationship, we provide funding for marketing to off market sellers to acquire their land.

Turnkey Funding

What is turnkey funding?
Turnkey funding combines our land investment knowledge and financing ability as a funder with the investor's contribution in the form of the land deal with the goal of making a profit upon resale of the property. In addition to funding 100% of the deal, we'll also oversee the marketing and sale of the property.
Do you have a turnkey funding deal example?
A land investor contacted us with their due diligence info on a parcel of land they had under contract. The purchase was approximately $15,000. It took us a few hours to review the deal and we replied back to the investor with our funding approval. We signed a turnkey funding agreement (investor and Parcel Funders) and then the investor reached out to the title company via email and cc'd us on it. The title company sent over the wire info and we verified it over the phone. Then, we wired the funds for the acquisition amount and title costs. After closing on the deal, Parcel Funders was recorded on the deed and both the investor and us were given digital and hard copy copies of all the paperwork from the title company. Then, we started marketing the property to sell it. Within 45 days, we reached out to the investor and let them know that we received an offer on the property and we agreed to move forward with the offer. At that point, we signed the necessary paperwork via DocuSign and then we shared the purchase and sale contract with the same title company. The title company received our profit percentage split and they disbursed the funds according to our ownership percentages at time of closing. We sold the property for around $60,000 and netted around $40,000. Parcel Funders received 55% of the $40,000 and the investor took 45% of the $45,000.
Do you have a minimum land market value for funding?
The property has to be worth at least $10,000 for us to consider funding the land deal.
What's your minimum profit margin for land funding?
We require a minimum net profit of $7,500 for us to consider funding the land deal.
How long do you have to sell the parcel of land?
We will have 12 months to sell the property. After 12 months, the investor and Parcel Funders will be able to jointly market the property.
Are you willing to fund seller financing deals?
Yes, we're willing to sell the property on terms, but 100% of the money paid by the buyer for the property must be paid to Parcel Funders until the cost of acquiring the property is satisfied. This includes the original purchase price, property owner’s association dues, property taxes, property liens, closing costs, and any other costs related to purchasing the property. Parcel Funders will be recapitalized within six  months or less of the acquisition settlement date. Then, we and the investor will divide the net proceeds of sale according to our agreed upon profit split percentage.
Do you provide funding for marketing to off market sellers?
Depending on the length and success rate of our funding relationship, we provide funding for marketing to off market sellers to acquire their land.
Where will you list my property for sale?
In order to ensure that the property obtains maximum exposure, we will list your property on one or more of the following services: CityFeet, Craigslist, Crexi, eBay, Estately, Facebook, FSBO, HomeSnap, LakeHouse, Land and Farm, Land Broker MLS, Land Century, LandFlip, LandHub, Lands of America, LandLeader, Land-Listings, LandPin, LandSearch, LandWatch, LDCRE, local multiple listing service(s) (MLS), Loopnet, LotNetwork, Movoto, OfferUp, Prime Land Exchange, Realtor, Redfin, Rural Vacant Land, Trulia, Xome, and Zillow. In addition, we'll market your property to our buyers list made up of more than 3,000 people.

Given our land investment knowledge, experience, and network, we’re able to provide you with a positive and hassle-free land  funding  experience. Spread the word about our simple, clear, and reliable land funding program and earn money with our referral program. 

280 E 1st Ave Unit 882
Broomfield CO 80038

719-508-7201

info@parcelfunders.com

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