Real estate wholesaling in Florida can be a lucrative venture, but sometimes, timing is everything. You’ve found a great property, lined up a buyer, but you are short on funds to get to close. This is where transactional funding for wholesalers in Florida comes in as a lifesaver, bridging the gap and making deals happen.
It’s a short-term loan designed specifically for real estate wholesalers, who act as middlemen between sellers and buyers. Think of transactional funding for wholesalers in Florida as the key for buying a property, to immediately sell it without ever taking possession, for a faster close and less overall hassle.
Table of Contents:
- What Exactly is Transactional Funding?
- Why Choose Transactional Funding?
- Double Closings and Transactional Funding
- Costs Associated with Transactional Funding
- Qualifying for Transactional Funding
- Finding a Transactional Lender in Florida
- Common Mistakes to Avoid in Transactional Funding
- Advanced Strategies in Transactional Funding
- Legal Considerations
- FAQs about transactional funding for wholesalers in Florida
- Conclusion
What Exactly is Transactional Funding?
Transactional funding is a specialized form of short-term financing. It helps wholesalers complete double closings. In a double closing, the wholesaler contracts to buy a property from a seller (the A-B transaction) and simultaneously contracts to sell it to an end buyer (the B-C transaction).
The wholesaler doesn’t use their own capital. Instead, they use the transactional funding to cover the purchase price in the A-B transaction, and the end buyer’s funds from the B-C transaction are then used to repay the transactional lender.
How Transactional Funding Works in Florida
The process is straightforward. You, as the wholesaler, find a property and negotiate a purchase contract with the seller (A-B transaction). At the same time, you market that property to the end buyer.
Once all the paperwork is lined up, the transactional lender steps in, wires money, and allows the purchase to take place, followed, same-day with the resale. Both these transactions should be in Florida to have it covered for transactional funding. It also simplifies coordination when all closing is in one title company, although it may cost more to have multiple title companies involved.
The end buyer’s funds are received. The transactional loan is immediately paid off, and you, as a wholesaler, keep the profits from the property and get to move on to another sale. It’s critical though that the buyer on the second sale closes or else you will be stuck needing to get funds for closing.
Why Choose Transactional Funding?
One of the greatest reasons to use transactional funding is that it lets wholesalers act without using their own cash. This can be great when your credit isn’t that great and the speed to close is needed sooner than what a hard money lender might offer.
Traditional loans often have paperwork, credit checks, and a waiting period, where, transactional funding offers speed and efficiency. Equity Max offers 100% financing through transactional loans with the ability to process loans fast.
Speed and Flexibility
When speed matters most, real estate investors use transactional funding, especially with foreclosures, short sales and auctions. Being able to fund rapidly is a necessity to not let great real estate opportunities slip.
The time frame from securing a purchase contract, marketing that purchase, getting the sale contract and funding a sale typically happens as little as 1 to 2 days with Private Money for Business Owners. Being able to process rapidly is one of many reason why wholesalers enjoy using transactional funding when funding opportunities happen.
Double Closings and Transactional Funding
Transactional funding and double closings go hand in hand. A double closing involves two separate transactions that happen on the same day.
There’s many reason to want to use transactional funding and even ways to mitigate having to need double closes when in Texas and doing transactional funding. Double closings allow real estate wholesalers to sell properties as often and quickly as they wish with only a small team involved, and it helps streamline getting property inventory to potential end-users too.
Benefits for Wholesalers
Transactional funding isn’t just for bridging a financial gap. It allows any size investor to act when an investment opportunity arrises without creditworthiness, and this lets wholesalers handle high transaction property volume as well.
Costs Associated with Transactional Funding
Transactional funding is convenient, but not without cost. The exact costs vary among many different reasons and it helps to get advice.
Most costs associated with double closing from 1% to 3% of the funds of your loan for double closings. If for whatever reason you require extra day funding then those charges can come to .25% per extra day.
Understanding these costs upfront is vital for determining the profitability of a wholesale deal.
Qualifying for Transactional Funding
Many do not get the value of transactional funding for closing real estate transactions in Florida. One of the best reasons why people don’t go this path though is their credit. There is good news.
Credit requirements might vary based on a lender’s rules, however many will cover your closings even without pulling a credit report or having a minimum score to achieve to fund transactions. Other common requirements involve having all parties ready for the closing and providing them all paperwork they request to give to borrowers before you even receive approval.
What Documents Might I Need?
You’ll have your purchase contract that outlines the deal and pricing on that agreement between a seller and a wholesaler, (the A-B contract). You’ll have your sale contract that details all conditions of the agreement to pass on that ownership or rights to end users.
There will also be settlement statements, so a title agent is critical to coordinate having everything necessary on-hand. It will vary when getting a loan but you must provide a comprehensive view into deals being arranged to give a full story.
Finding a Transactional Lender in Florida
Not every lender will use transactional funding, many have specialties that they use, even in private lending markets, that’s one reason many have been able to close. Partnering with the correct transactional funder, is critical though to make sure to fund double closings.
Jet Lending is a nationwide private lender that works hard for providing wholesale properties for all levels of real estate experience. If your credit score isn’t all that great you can explore a different provider Tidal Loans as one option for getting a transactional funding.
Partnering with Experts
At FundMyDoubleClose.com, we do more than providing lending services, we partner and strategize with all different property buyers.
We offer transactional funding and provide great service. Our team has experience in the real estate industry, allowing us to understand the needs of wholesalers.
If you’re ready to close a deal, we’ll provide the support and fast funding options you need.
Common Mistakes to Avoid in Transactional Funding
Being in the business of transacting real estate since 2005 has shown us some pitfalls with funding. Timing is always huge. Everyone from title companies, wholesalers, sellers and end buyers all need a closing at a given day and time.
When those days don’t sync or parties don’t fulfill contract responsibilities and have their funds ready or the house is incomplete for the contract signed, closings fall apart or can get delayed. Avoiding all of that in the process for double closings for transactional funders, is to make sure things are pre-organized and prepped.
Mitigating Risks
One key step that can be helpful for investors on a budget, is negotiating who handles closing and acquisition when selling. Being sure to understand and agree upon it when under contract on sales for property, investors could get much of those fees to zero.
By clearly defining roles and responsibilities, you can avoid potential conflicts or delays.
Advanced Strategies in Transactional Funding
Once a basic transactional understanding happens for funders and closing transactions, advanced tactics might offer more value or less complexity.
Using land trusts give advantages when doing back to back sales in properties and wholesaling. These trusts are tools that will title and ownership of homes but without a purchaser’s full details on record.
Instead of selling a house outright using trusts can increase or decrease benefits on behalf of interests without an extra fee.
Legal Considerations
While transactional funding and double closings are legal in Florida, there are still things to look out for with this way for funding. One aspect that often comes in conversations with title closings and sales is who should title attorneys represent, and having that transparency helps everyone.
Being honest, and forthright will ensure things operate smoother. Working with an experienced real estate attorney can help you stay compliant and avoid potential legal issues.
The attorney can review contracts, provide guidance on disclosures, and help address any concerns.
FAQs about transactional funding for wholesalers in Florida
How do I get transactional funding?
To get started with it, start with having your purchase sales agreement and a title company involved and in mind. Then get in touch and ask for assistance, in most situations transactional funds are for only 1 or 2 days.
Make sure you have a buyer lined up (B-C contract) before applying.
Be prepared to provide all necessary documentation promptly.
What services offered by wholesalers transactional funding?
Services offered cover having money short term, helping bridge time on properties that have an end buyer without actually owning property at any moment in time, keeping things smooth and risk reduced.
Wholesalers can focus on finding and securing deals. It also reduces financial risk since you’re not using your own capital.
What is an example of transactional funding?
You agree to acquire something from the owner, then flip it at the price you agreed to that owner, but you dont have to have a loan to get funds for completing that.
For example, you contract to buy a property for $100,000 (A-B) and simultaneously contract to sell it for $120,000 (B-C).
The transactional lender provides the $100,000, and you pocket the $20,000 difference, less the lender’s fees.
What is transactional funding for wholesaling real estate?
Transactional funding is the financing tool enabling investors purchasing real estate, but with the goal for reselling real estate to the end party who is also waiting, immediately, giving it an advantage as it happens immediately too.
It’s a short-term loan that allows you to purchase a property and quickly resell it to an end buyer. It avoids needing large sums of your own cash.
Conclusion
Transactional funding for wholesalers in Florida offer tools necessary to acquire and fund opportunities fast without typical lending. Transactional funding helps fill one of the funding gaps.
Understanding, knowing and working closely on deals, even with lenders who are also investors could simplify or grow profits. All with a win-win funding tool available right in our community.
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.
Ready to Secure Fast Funding?
Don’t let slow double close funding stop your deals. It’s absolutely free to inquire—click below to get started and close with confidence.
Our experienced professionals are ready to provide the funding solutions you need.
Don’t let financing hold you back—reach out now and let’s make your next transaction a success.