You’re a real estate wholesaler, and you’ve found a fantastic deal. The only problem is, it is a double closing, you need quick capital, and same-day transactional funding might be your key to unlocking that wholesale deal. This type of financing lets real estate investors quickly purchase and sell property.
You’ve probably heard whispers of traditional money lenders, but the speed of same-day transactional funding is different. This is not your average, everyday short-term loan, it’s rapid.
Table of Contents:
- Understanding Same-Day Transactional Funding
- Who Benefits from Transactional Funding?
- The Double Closing Process with Same-Day Funding
- Costs of Transactional Funding
- What You’ll Need for Same Day Transaction Funding
- Same-Day Transactional Funding in Texas
- Beyond the Basics of Same-Day Transactional Funding
- Earnest Money Deposit (EMD) Loans and Same-Day Funding
- FAQs about same-day transactional funding
- Conclusion
Understanding Same-Day Transactional Funding
Same-day transactional funding is a short-term loan. It is used specifically for real estate transactions where the estate investor buys and sells a property within a very short time, sometimes even the same day.
The money comes in quickly. You use the funds to purchase property from Seller A, then sell property to your end buyer, Buyer B, immediately.
How Transactional Funding Works
Think of it as a bridge. This money helps close transactions for the first transaction (A to B) of double closings.
Once your end buyer’s (B to C) funds come through, you immediately repay the transactional loan. You, as the estate wholesaler, pocket the difference as profit. Simple, right?
Who Benefits from Transactional Funding?
Real estate wholesalers are the primary users of this strategy. This process works best for the wholesaler since the contract might not be assignable with same-day transactional funding.
Sometimes sellers, especially banks or government entities, include a non-assignability clause. Situations where this process works are when a property comes from MLS.
Why Use Transactional Funding?
You can stay in compliance. This will avoid disclosing how much profit is being made.
This funding demonstrates you are the actual cash buyer. You’ll gain instant credibility with this type of funding for your real estate purchase.
The Double Closing Process with Same-Day Funding
A double closing involves two separate transactions. The first is between the original seller (A) and you, the wholesaler (B). The second is between you (B) and your end buyer (C).
This keeps everything transparent. Also, this avoids legal problems down the road.
Breaking Down the Steps
You find a motivated seller (A) and negotiate a purchase price. Then, you find an end buyer (C) willing to pay more for the property.
Next, you secure transactional funding to cover the purchase from Seller A. On the closing day, you use the funding to buy the property from Seller A. Simultaneously, you sell property to Buyer C, using their funds to pay off the transactional loan and closing costs. Finally, you get the remaining balance as your profit.
Costs of Transactional Funding
Transactional funding isn’t free, but if done correctly, the returns will be worth it. Transactional lenders charge fees based on the loan amount and duration.
FundMyDoubleClose.com offers rates as low as 1% for loans up to $1,000,000. For this situation the money can be funded the same day with a $1,000 minimum.
Example Scenario Costs
Let’s do some simple math. Imagine securing $100,000 to be repaid a week later.
If the rate is 2%, it’s easy to think, “Wow that would cost $2,000.” Remember this short timeframe so in a case like this it is common. The ability to close deal in short notice has a small price.
What You’ll Need for Same Day Transaction Funding
To get this funding is usually very simple, because there are few eligibility requirements. This process is less tedious when it’s done.
A key piece of data would be to confirm that funding will be repaid. Proof of an executed sales contract to Buyer C will be sufficient for repayment, therefore, very little documents and no experience are needed.
No Credit Checks
Most transactional lenders don’t focus on credit score. The end buyer’s signed buyer contract shows the funding deal is able to be closed quickly, therefore; eliminating a need for these reports.
Because there are little eligibility requirements, transactional funding for real estate makes the estate investing process run smoother. No need for tedious paperwork and unnecessary records that would typically be required for money loans.
Same-Day Transactional Funding in Texas
If you’re an estate wholesaler in Texas, there are companies specializing in this funding. Consider exploring local options.
Transactional funding providers are aware of Texas real estate market laws. Partnering with one could prove helpful,
Working With the Title Company
The title company plays an important role. They need to send confirmation the money will stay in escrow to avoid delays.
Be ready with their confirmation document. Doing so could potentially make you avoid issues and increase chances of funding deal.
Beyond the Basics of Same-Day Transactional Funding
While same-day transactional funding serves all kinds of uses for real estate transactions, not just estate wholesalers utilize it. People are starting to learn, it is beneficial to the end buyer for quick funding with the right agreements.
Same Day Transactional Funding with Seller Carry Transactions
There is a growing presence and acknowledgement that Seller Carry Transactions, exists and more individuals are finding it resourceful. In seller carry transactions, the seller finances the buyer’s purchase.
The rates are typically similar to funding double closings. FundMyDoubleClose offers,1% for loans up to $1,000,000 that funds the same day if qualifications are met.
Same-Day Funding Options Comparison Table
Consider the information in the following table.
| Loan Amount | Funding Time | Rate | Minimum Fee |
|---|---|---|---|
| Up to $1,000,000 | Same Day | 1% | $1,000 |
| $1,000,000 – $2,000,000 | Multiple Business Days | 2% | Varies |
| $2,000,000 – $5,000,000 | Multiple Weeks | 3% | Varies |
Earnest Money Deposit (EMD) Loans and Same-Day Funding
An EMD is given for additional resources for capital to invest. The seller holds on to this deposit while transaction details are handled.
If it closes, the seller will credit the deposit in place of payment, or potentially keep funds if it falls through. The seller can hold you accountable.
FAQs about same-day transactional funding
How long does same day funding take?
Same-day funding can often be completed within hours, but it depends on all parties. Making sure all of the needed items is necessary for the process to move forward and swiftly.
What is an example of transactional funding?
A wholesaler finds a property for $200,000 and an end buyer for $250,000. Transactional funding gets you the cash. Next the money used to purchase property for $200,000, which, is resold to their buyer for $250,000 with you pocketing the profit after closing costs.
How much does transactional funding cost?
The cost of transactional funding varies depending on different factors, lender, and loan amount. The costs of funding can go between, “2% and 12% of the total loan amount”, says Fortune Builders.
What are the requirements for transactional funding?
Requirements might include an agreement between motivated parties and documented proof. Some commonalities like LLC might be included but could change. Make sure the title company has a written confirmation in the account for escrow.
Conclusion
Same-day transactional funding isn’t as complicated as you think. Real estate investors, or beginners exploring it for their use, will see value in using this service for a double closing on investments and money loans.
With the right preparation and a deal ready, access capital quickly and close transactions efficiently. This short-term loan helps you focus on your investment goals without getting bogged down in lengthy financial processes.
At FundMyDoubleClose.com, we specialize in transactional lending solutions tailored for real estate investors and wholesalers. Whether you're interested in double closings, earnest money deposit (EMD) loans, or seller carry transactions, our team is here to assist you.
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