Best Transactional Funding: Top Options for Real Estate Deals

For real estate wholesalers, securing capital for deals can feel like a constant uphill battle. Many might assume traditional loans or hard money lenders are the only routes. But for those in the know, the best transactional funding offers a faster, and sometimes, a more flexible approach for situations like a double closing, where you’re buying and selling the property to an end buyer.

This method gets you the funds you need without tying up your capital. This opens investment opportunities, especially in fast-moving markets or when dealing with multiple wholesale properties as a real estate investor. Finding a provider in the field for best transactional funding could change the game completely for investors.

Table of Contents:

• What is Transactional Funding?
  • How Transactional Funding Works
  • Benefits for Real Estate Investors, Estate Investors
• Choosing a Provider for Best Transactional Funding
  • Key Factors in Transactional Funding
  • Reputation of the Lender for a Transactional Funding Loan
• Best Transactional Funding Costs
  • Comparing Lenders Costs and Services for Transactional Lenders
• Transactional Funding: Navigating Potential Risks in Real Estate
  • Common Problems: End Buyer Backing Out for Real Estate Investors
  • Mitigating Problems in the Transactional Funding Process
• Best Practices of Real Estate Investing
  • Advanced Tips in the Real Estate Industry
• Conclusion

What is Transactional Funding?

Transactional funding is a type of short-term loan. It helps real estate investors, particularly wholesalers, to buy a property and quickly resell it. Usually, the buying and selling happens within hours or a few days, giving you quick access to funds.

The money lender provides the needed capital for the initial purchase. Once the investor sells the investment property to the end buyer, those funds are used to pay back the transactional loan, including any fees.

How Transactional Funding Works

Transactional funding, often used in transactional funding wholesaling, typically involves three parties. “A” is the original seller. “B” is you, the real estate investor or wholesaler, and “C” is the end buyer.

The transactional lender provides the money to buy the property from “A”. Then, you immediately sell that property to “C”, and a portion of that amount is used to pay back the same-day funding, usually with just a modest processing fee.

Here’s a basic sequence:

1. You find a property, get it under contract, and secure an end buyer for resale.
2. Apply for transactional funding, providing proof of both deals that will close at nearly the same time.
3. The money lender provides the capital for the purchase (“A” to “B” transaction).
4. You quickly complete the sale to your buyer (“B” to “C” transaction) immediately.
5. Use the income of the sale from “C” to repay the funder the purchase price, plus their transactional loan fees.

Benefits for Real Estate Investors, Estate Investors

One of the primary attractions to transactional funding is that you can have your deal funded. Most transactional funding lenders don’t require things like your credit report, a background check, or upfront fees. They are most interested that you have an end buyer who is able to complete the transaction.

This short-term loan approach works really well when the investor plans to sell the property quickly. It fits wholesale deals because often, personal capital isn’t used to purchase properties to close transactions.

Choosing a Provider for Best Transactional Funding

Finding the right provider for the best transactional funding involves a number of different variables. Real estate investors need to know what sets various funders apart in the market when dealing with capital funding.

When weighing the loan terms of your offers from transactional lenders, check into all aspects. Are you working with an actual private money lender or a broker who will send your deal to another lender to process the transactional loan?

Key Factors in Transactional Funding

Consider things such as their fee structure, as some might be based on the purchase price, while others might add an origination fee. It helps if your transactional funding lenders give 100% of your funding. That makes it simple for you in closing wholesale deals and will help with working with the closing agent to do your deal.

The speed of processing matters. You may only get approved for 24 hours up to several days; that might be all the closing costs to factor for funding in your budget, even to offer transactional services at all.

Reputation of the Lender for a Transactional Funding Loan

Always do your homework. Look for reviews or even testimonials when reviewing lenders. You will want one that offers excellent customer support through every part of the funding process.

For example, Best Transactional Funding is widely considered a leader in the sector. They offer customer service, rapid processing, and highly competitive rates. Some of their Google reviews include statements like: “most responsive and had the best pricing” or “most thorough explanations posted”.

Best Transactional Funding Costs

Transactional lenders often avoid the long, drawn-out approval process of typical mortgages. As a private money lender, these funding lenders can release funds within 24-48 hours because transactional loans are usually funded with private money.

Transactional loan costs often take a different shape, such as:

• Transaction Fees are common to offer transactional coverage. It may be a small percentage (1-3%) of the total transactional funding real amount you receive, similar to origination fees in regular investment property loan agreements.
• Processing Fees: Transactional funding providers might ask for upfront fees to do a transactional loan that will go through closing costs. Review all offers, terms, and agreements before moving ahead with money lenders for same-day funding.
• Closing Costs: Sometimes, there are separate closing costs that need to be paid to the closing agent when doing a real estate transactional funding deal. It is crucial that all aspects of any real estate deal that happens are calculated for by you.

Comparing Lenders Costs and Services for Transactional Lenders

When deciding who has the best transactional funding, understand exactly what the funder offers before getting any money loans. It’s useful if the transactional lender is flexible with loans.

Comparing Top Lenders of the Best Transactional Funding

Lender	Location	Loan Term	Fees	Max Funding
Equity Max	Florida	1 Day	From $1,000 (loans under $500,000)	No Limit
Coastal Capital Funding	Virginia	1-3 Days	2-3% + $495 processing fee (part of closing)	Varies
Paces Funding	Atlanta	1-2 Business Days	1.75% of initial transaction	Varies
Washington Capital Partners	Washington	Varies	Origination fee + $1,000 processing fee (at closing)	$10 million
Jet Lending	Texas	Within 3 Days	Varies	Varies
Tidal Loans	Texas	Varies	2% (1% if end buyer uses them)	Varies
Best Transactional Funding	Florida, also active nationally	Same Day Possible	Starting as low as 0.5% – 1% + Wire fee	Varies

Equity Max, for instance, uses a flash funding model to give rapid transaction funding approval. EquityMax needs the end buyer to demonstrate they are able to close the deal, which helps ensure that things will proceed in getting funding lenders’ funds returned rapidly.

Coastal Capital Funding focuses on streamlining the closing process with same-day funding. Washington Capital Partners are experts in larger deals of capital funding, sometimes getting transactional loan options of up to $10 million, which some smaller firms that handle transaction funding would struggle to meet, along with closing costs at that high of funding levels.

Transactional Funding: Navigating Potential Risks in Real Estate

Any smart real estate investors understand that any money loan includes an inherent risk. Review how to manage issues effectively that might appear during the double closing so things are smooth with the title company when selling the property in that short timeframe.

Common Problems: End Buyer Backing Out for Real Estate Investors

When your “C” buyer delays closing or gets cold feet, this creates major problems. Because the funding works as flash funding on a strict timeline, if your end buyer is not ready to settle, it creates significant stress with funding lenders of those initial funds. To lessen potential problems with an end buyer, you want to use an actual purchase agreement versus any assumptions about how the second transaction might go.

That signed agreement is good faith from the end buyer of them having done proper due diligence and things should close.

Mitigating Problems in the Transactional Funding Process

Here are things you can do, beyond making sure that your end buyer contract is solid.

Open communication and be on the same page as the parties involved. Check in with the seller, the end buyer, the title company, and funding lenders. This allows for problems that crop up with any flash funding closing in selling the property and for all parties to work as a team on behalf of all entities involved for their profitability.

Understand state laws because some places have various limits in place for how things like funding loan requirements might be handled as it relates to short-term loans for real estate investors. The last thing anyone would want is to encounter problems at closing because local, regional, or national restrictions got in the way that did not have the property in compliance with various aspects.

For extra insights into securing end buyers, consider options like networking or promoting through the lender’s contacts, similar to what Washington Capital Partners offers to funding loan borrowers with investment property needs.

Best Practices of Real Estate Investing

Real estate professionals seek efficient ways to close their deals with short-term loans and quick financing. As more funding lenders emerge in the field, reviewing real estate transactional funding takes wisdom. Using a transactional loan should fit a broad investing plan.

When building the initial transaction between the buyer, understand the potential of the end buyer to move the wholesale deal through on a flash funding situation.

Advanced Tips in the Real Estate Industry

Beyond finding that funding strategy for yourself in handling same-day funding and processing fee review with private investors for those transactional funding works, learn advanced approaches.

Study your competition for transactional funding for wholesalers. Watch how other local estate investors work their double closing strategy and if they sell property to certain kinds of buyers to get fast funds returned. Are their wholesale deal strategies using the same processes for handling end buyer communications?

Conclusion

The landscape of real estate has rapidly evolved. Navigating all the details of real estate deals might be complex, but those real estate professionals who think beyond old ways, consider the best transactional funding, and are adaptive to changing situations are often positioned better in the real estate industry.

Whether closing back-to-back sales quickly or entering new real estate investing situations with limited cash in pocket to start with, transactional funding lenders give ways of funding that don’t rely on regular financing routes. Those regular routes need more due diligence to have properties completed and closed before they ever approve you as the buyer.

Choosing the right transactional funding opens possibilities to leverage good investment opportunities when they are found. Real estate investors seeking to expand their strategies should definitely consider this field. The best transactional funding is used most often by smart, well-informed, educated real estate investors.