What is Transactional Funding?
Transactional Funding is typically a one-day loan used in wholesale transactions requiring a double closing. When the wholesaler does not have enough cash to close the transaction or the title company will not allow a pass-through closing, transactional funding is needed. With transactional funding the transactions close simultaneous, which ensures all parties to the transaction are able to fund the same day, and the wholesaler’s profit is not known to the buyer.
Example of Transactional Funding
A wholesaler contracts a property from the seller, (Contract A to B). Then the wholesaler contracts the property with the end buyer, (Contract B to C). In most cases the wholesaler is required to fund their transaction from the seller “A-B”, before selling to the buyer “B-C”. Transactional funding satisfies this requirement. Once the simultaneous transactions are completed, the loan is paid back to the lender and the wholesaler realizes their profit. Please note that transactional funding is only utilized for simultaneous closings.
Transactional Funding with DFW Hard Money
DFW Hard Money can fund 100% of the transaction to the title company. Once all funds from all parties are received, the title company disperses funds and the transactions is closed. Fees can range from half a point to one and a half points. All funds are provided by DFW Hard Money and the borrower is not required to put any money down at closing. The points due for the loan will be taken out of the proceeds at closing. The only funds the wholesaler will receive is their profit.
How to Qualify
DFW Hard Money does not require a credit report or back-up information to approve transactional funding. Just have the end buyer in place and “A-C” contracts all closing at the same title company. For more information please check out DFW Hard Money – Transactional Funding.