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#1 - What is Transactional Funding?
Transactional funding is a very short-term loan used by real estate wholesalers to facilitate their deals. Real estate wholesalers usually find deeply discounted deals and connect sellers and buyers for a profit. But don’t call wholesalers ‘brokers’ – there is no public marketing and the wholesalers has to enter contract in order to secure the deal. Transactional funders provide the money needed to either enter a secured contract or an earnest money deposit with the seller. Wholesalers then either assign the contract to a buyer or double escrow to the end buyer.
If you are performing a double escrow (or double close) or assigning the contract and need ‘same day’ funds – transactional funding can make it happen in a matter of a day or two. It is not unusual for the entire transaction to be no more than 1 or 2 days total.
#2 - Who Can Use Transactional Funding?
Wholesalers who don’t want to use their own money are the best example of transactional funding. By using other peoples money, wholesalers can make money from pure hussle. It can be used for other business transactions, but it’s mostly flippers and real estate pros who use it as a tool to facilitate deals. Transactional funding can be used for the following:
- Double escrow
- Bank sale or short sale
- Auction real estate
- Contract Assignment
- Earnest Money Deposit
- Flip any real estate – single family home, commercial, or land
#3 - How to Qualify for Transactional Funding for Wholesale Real Estate?
The timeline for transactional funding is very short – it takes just a few days to get approved and the funds are used for just 1-2 days. It is a high-risk. high-reward strategy that requires to have all your ducks in a row. To qualify you’ll need to find the property and secure the seller and the buyer – both ready to move. This is the major requirement that you’ll have to meet in order to qualify for transactional funding. In addition:
- Documentation that shows you have the property secured from the seller
- A cash buyer that is ready to purchase the property from you (or a buyer with financing)
- You don’t need any cash in order to qualify
- There are no credit checks
- No upfront fees
- No income verification
- No appraisal or inspection
- Valid in all 50 states and DC
#4 - What is the best way to find transactional funders?
The name of the game in wholesale real estate is speed. When you find a hot deal, line up all the parties – the last thing you need a funder that will play games. To find someone who will provide you money to secure the purchase and sale agreement, you can try to apply with you local hard money lender, or find a benefactor in your local real estate investing club.
Our unique program is designed to give wholesalers maximum flexibility in funding their deals and close deals quickly. You are not required to bring any of your own money into the transaction – just find the deals and line up the parties. There are no upfront fees, no credit checks, and no income verification. Apply today and get approved in a few days.
#5 - What is the difference between transactional funding and a hard money loans?
Both transactional funding and hard money loans share a common theme – high risk money provided from one party to another. While a hard money loan is just like a traditional loan with less requirements, a transactional funding is different in practice – it’s usually not structured as a loan. Most transactional funders provide the money to facilitate a secured transaction as a joint venture, also called ‘cash-on-cash’ investment. The money is secured by the discounted contract provided by the wholesaler, and is only approved once all parties are ready to move.
There is also a significant difference in what is required to get approved. Transactional funding requires almost no documents to get approved. Credit and income do not matter, and investors do not need to meet LTV requirements in order to qualify. That’s not to say it’s easier to qualify for a transactional funding – you still need to find a discounted deal, convince the seller to sign, and find a cash buyer.
Apply Now for the Best Wholesale Flip Funding
Our unique transactional funding program provides the maximum flexibility for wholesale professionals. This is a very unique niche and specialized for wholesale flippers and those who are looking to double escrow a hot property. If that person is you – and you have all the parties lined up – give us a call or send us a request.
- Time required to get qualified for wholesale funding: 6-8 days
- Documents required – signed PSA, buyer/seller lined up
- No appraisals, no income verification, no credit check, and no upfront fee