Transactional Funding

Funding for Wholesalers

Transactional funding is another type of short-term, hard money loan that is specifically geared towards wholesalers. It allows for the quick purchase and resell of an investment property to occur on the same day.

Transactional Times!

Start your Transactional Funding process with these details:

Call (832) 639-0589

What is Wholesaling?

And Why Do I Need Transactional Funding?

Wholesaling involves purchasing properties at a discount to sell them for profit to an investor who also plans to make a profit. Transactional Funding is sometimes called an “AB-BC” or “double close” transaction.

Party A, the property seller, sells to Party B, the wholesaler.

Party B then sells to Party C, the end buyer, on the same day.

3 Most Common Uses for Transactional Funding in Wholesaling

Sometimes wholesalers need funding to perform same-day transactions in which they close a purchase contract to complete the “assignment of contract” or sales of contract property to the end buyer. Texas wholesalers commonly use this type of short-term loan for three reasons.

Transactional Strategy #1

Non-Assignable Contracts

Purchase, repair, and quickly sell the property

The property that the wholesaler wants to purchase is not assignable to a third party. This means that the property the wholesaler is planning to flip and “assign” to the end buyer is most likely owned by a government agency, REO, Fannie Mae, Freddie Mac, etc.

Transactional Strategy #2

Transaction Creditability

Quickly purchase and resell the property.

When a wholesaler uses transactional funding, it allows the seller to perceive them as the end buyer or cash buyer at the closing table. Instead of showing the property on the cash investors’ schedule or being perceived as the go-between or representative of the buyer or sellers, they deal with scheduling cash investors to show the property (which sometimes upsets the seller) and hoping they close on time.

Transactional Strategy #3

Non-Disclosure of Assignments Fee

Funds for repairs on a property already owned. Quickly resell.

There are times when as a wholesaler, you will make a great deal of profit on a wholesale deal, and the end buyer may not want to do the deal because he sees the assignment fee is too high. When you choose transactional funding, the profit on the sale is not disclosed on the closing statement.

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