Mastering Transactional Funding Double Close for Real Estate

Real estate wholesaling can be a lucrative venture. But sometimes, traditional financing methods can slow things down. That’s where transactional funding for a double close comes in, offering a fast solution for real estate wholesalers.

Think of a transactional funding double close like this: it allows you to purchase a property and resell it almost instantly, often within the same day. This setup avoids holding the property long-term. It also helps avoid getting tied up in traditional loans.

Table of Contents:

• Understanding the Double Close Process
  • Why Choose Transactional Funding?
  • Key Players in a Double Close
  • Navigating the Legal Landscape
  • Benefits of Transactional Funding Double Close
  • Comparing Funding Options
  • Structuring the Deal: A Step-by-Step Approach
  • Understanding Transactional Funding Tiers and Costs
  • Mitigating Potential Risks
  • Finding the Right Funding Partner
• FAQs about transactional funding double close
  • What is transactional funding for double closing?
  • What is the double closing method?
  • What is a transactional funding?
  • Is a simultaneous closing the same as a double closing?
• Conclusion

Understanding the Double Close Process

A double closing involves two separate real estate transactions. First, the wholesaler (Party B) buys the property from the seller (Party A). Then, the wholesaler immediately sells the property to an end buyer (Party C).

This “A-B, B-C” structure has a couple of main advantages. One study published at DoubleClose.com points out that the speed allows you to keep the difference between the first contract price and the next contract price. It also keeps your profit margin private, so neither the seller nor the end buyer sees exactly how much you’re making.

Why Choose Transactional Funding?

Traditional financing can be time-consuming. Transactional funding, on the other hand, is designed for speed. You get funds quickly, enabling the seamless execution of a double close.

This kind of financing helps in situations where time is critical. Transactional funding service is useful with non-assignable contracts, or properties from the MLS, and government entities like HUD and Fannie Mae.

Key Players in a Double Close

Several key players make a double close happen smoothly. It all starts with getting a seller of a property that has features that another party, known as an investor, is interested in.

Next, you have an end buyer who sees the property’s ultimate value. Lastly, you would then coordinate with a title company experienced in double closings. We work hard to give you everything you need, so things happen very quickly, even as fast as the same day.

Navigating the Legal Landscape

Double closings, while efficient, do have to operate within a specific legal framework. While they have many similarities, regulations differ slightly from state to state, according to an overview found on Marina Title’s site. Things can even go sideways for real estate wholesalers.

A common risk mentioned by Empora Title in a recent article is financing complications and clouding the property’s title. Working with a company that understands these regulations is crucial.

Benefits of Transactional Funding Double Close

There are several key benefits. First, you don’t need the typical mountain of paperwork, and second, the speed involved. These kinds of real estate investor loans mean getting funds, sometimes on the same day.

These types of deals help avoid the delays with a traditional mortgage. According to Rocket Mortgage in their published post “Double Closing: A Real Estate Investment Strategy,” banks and other lenders often take 30-60 days for closing and funding. We, on the other hand, can do this in as fast as 1-day.

Comparing Funding Options

Let’s see how transactional funding stacks up against traditional financing options in the table below:

Feature	Transactional Funding	Bank Financing
Approval Time	Often Same Day	20 – 30+ days
Funding Time	As Soon as 1 Day	30 – 60+ days
Interest Rates	Starting at 1%	Varies, Often 6%+
Down Payment	None	20%-35% Often
Qualification Needs	Minimal, Often None	High (credit score, liquid cash, etc.)

As shown, transactional funding is quick with less needs. There is no credit check needed.

Structuring the Deal: A Step-by-Step Approach

Let’s walk through the double closing process:

1. Finding the Property: This starts by doing marketing to acquire properties that would benefit an end buyer in our situation.
2. Secure an End Buyer: You will next need to work with and line up potential end buyers, investors, or others before even committing. You can gain access to our nationwide list of cash buyers.
3. Agreements: You, as the wholesaler, sign a purchase agreement with the property seller (A-B transaction). Then, sign a separate agreement with the end buyer (B-C transaction).
4. Transactional Funding Application: Connect with us, and tell us about your deals and financing needs.
5. Funding Approval and Release: Once you connect, we are then ready to execute and even fund it.
6. Closing: Both transactions (A-B and B-C) close, ideally on the same day. Our funds let the first purchase happen, then the end buyer’s funds repay the transactional funding loan and we pass along to you any agreed profit on the resale.

We handle everything from A to Z when this happens, even as little as $10,000 all the way to $5 million according to realestatedoubleclose.com. Here are more details on rates and requirements for Transactional funding, which we break into Tiers below.

Understanding Transactional Funding Tiers and Costs

Cost does factor into any smart financial decision. It is key for helping your cash flow.

Tier 1 loans are up to $1,000,000, and we fund them as quick as the same day. This works out as a 1% rate, but has a minimum fee of $1,000.

Next are the Tier 2 loans. These cover loans for between $1,000,000 and $2,000,000. These loans at a 2% rate. Also, they will need several days for us to secure and process the funding.

Our last set of funding comes in the form of Tier 3 loans. These deals run between $2,000,000 and $5,000,000. Since it can require a lot more effort to line up funding from several partners, these transactional funding deals can have weeks of lead time and cost 3% to acquire for a deal. Also note, we do charge 0.25% for each additional day our money sits in escrow.

Mitigating Potential Risks

Like any financial dealings, risks are part of life. Be sure to review any contract details.

One concern can arise when a lack of transparency causes issues with all of the agreements in question. Always think in advance before making an agreement. Another part of the process where people mess up is they fail to offer proof of funds letters to their seller.

Finding the Right Funding Partner

Having partners with similar interests gives you great opportunities. When thinking about selecting a company that knows the transactional funding world, do your research.

At FundMyDoubleClose.com, we understand, from first-hand experience, how key timing and partnerships are. It starts with you telling us some high-level details, but even when the loan is under process, it’s key that we can work quickly. If our loan is over $1 million, then you’d need to work with our attorney for that.

In the real world, things don’t always work the same way. But if it is an A-B, B-C process, as mentioned in content at cashdoubleclosing.com, then it’s an even smoother process. You should speak to our customer service team for clarity on this. This applies for additional documentation requirements also.

FAQs about transactional funding double close

What is transactional funding for double closing?

This question frequently comes up with our team. So that you feel secure, you must get answers you trust. Transactional funding is used in a real estate “double closing” process and refers to quick, short-term loans to assist with purchasing properties.

What is the double closing method?

The double closing method has two distinct transactions happening in quick succession. It’s simple to learn as you practice things. A seller sells to a wholesaler (Transaction A-B) and that wholesaler quickly sells the property to a different buyer (Transaction B-C).

What is a transactional funding?

Transactional funding is a specialized, very short-term loan. These loans are also known as 1-day funding. They typically fund double closings in the real estate world, where you purchase property and resell it quickly.

Is a simultaneous closing the same as a double closing?

Yes, a “simultaneous closing” is a known alias of “double closing”. All refer to the same A-B, B-C transaction approach. Other known ways this goes by are “back-to-back closing” or even A-B-B-C type of transactions according to Y2 Lending.

Conclusion

Ultimately, a transactional funding double close is a useful tool for real estate wholesalers. It provides a fast financing method when quick property flips happen. The funding fees are usually a small price to pay.

Knowing the steps involved and a partner’s role in the funding gives everyone involved peace of mind. There is a science on how to maximize wholesale profit, and we can help. As your deals need new levels of funding, think about using us when you grow.