Transactional Funding for Wholesalers in Georgia FAQs

Real estate wholesaling can be a lucrative path, especially in a dynamic market like Georgia. But what happens when you, as a wholesaler, find a great deal but lack the immediate funds to close the deal? This is where transactional funding for wholesalers in Georgia becomes a vital tool, offering a lifeline to capitalize on opportunities.

It’s a short-term loan specifically designed for double closings. It enables wholesalers to purchase and immediately resell a property, often within the same day.

This rapid turnaround allows for quick profits. Because of this efficiency, transactional funding for wholesalers in Georgia can be a game-changer.

Table of Contents:

• What is Transactional Funding?
  • How Transactional Funding Works
• Why Use Transactional Funding in Georgia?
  • Benefits for Georgia Wholesalers
• Transactional Funding Costs in Georgia
  • Example Fee Structure
• Finding Transactional Funding in Georgia
  • Questions to Ask Potential Lenders
• Tips for a Smooth Transaction
• FAQs about transactional funding for wholesalers in Georgia
  • How do I get transactional funding?
  • How much does transactional funding cost?
  • What services are offered by wholesalers offering transactional funding?
  • Is wholesaling illegal in Georgia?
• Conclusion

What is Transactional Funding?

Transactional funding is a short-term lending solution. It is designed exclusively for real estate wholesalers engaged in double closings, also known as back-to-back transactions.

In a double closing, the wholesaler (Party B) contracts to buy a property from the seller (Party A). Then, the wholesaler immediately resells it to an end buyer (Party C).

The wholesaler doesn’t invest their own capital. Instead, the transactional lender provides the funds for the initial A-B transaction, and these funds are repaid from the proceeds of the subsequent B-C transaction.

How Transactional Funding Works

The process begins when a wholesaler identifies a property and secures an end buyer. They then establish contracts with both the seller and the buyer.

Subsequently, the wholesaler applies for transactional funding, often referred to as a “same day fund”. The lender reviews the deal, paying close attention to the signed contracts and the end buyer’s confirmed ability to close.

Upon approval, the lender wires the funds to the closing attorney or title company. The A-B transaction is completed, followed immediately by the B-C transaction, and the lender is repaid, along with their fee.

Why Use Transactional Funding in Georgia?

Georgia’s real estate market is known for its fast pace. Transactional funding offers Georgia wholesalers the ability to remain competitive.

You don’t need to provide personal cash or have a strong credit history. This is advantageous, opening doors to deals that might otherwise be unattainable.

This funding method enables rapid deal closures, often within a single day. It’s all about speed and simplicity, as highlighted by findings from DoubleClose.com.

Benefits for Georgia Wholesalers

There’s no need for traditional loans. This includes credit checks or appraisals, streamlining the process considerably.

It serves as a financial bridge in double closings. You are enabled to get a property under contract, by having the cash buyers lined up with ready money.

Wholesalers can undertake more deals without tying up personal capital. Increased deal flow often translates to higher profitability.

Transactional Funding Costs in Georgia

Transactional funding is not free; lenders charge fees for providing this service. Lenders offering transactional funding options, collect based on providing the service.

These fees typically range from 1% to 3% of the loan amount, but can sometimes be higher. The exact percentage depends on the specific lender and the details of the deal.

Some money lenders may impose additional fees. Thoroughly reviewing the terms is essential.

Example Fee Structure

Here’s an example of a potential fee structure:

Loan Amount	Fee
Up to $1,000,000	1% (minimum $1,000)
$1,000,001 – $2,000,000	2%
$2,000,001 – $5,000,000	3%

This table illustrates a common fee structure. Keep in mind that different firms might have varying approaches.

Careful consideration of these costs is vital. Make sure to compare options before committing to a lender.

Finding Transactional Funding in Georgia

Numerous private lenders across the United States offer transactional funding. Thorough research is needed to identify suitable options.

Some specialize in providing fast transactional funding, catering specifically to real estate wholesalers. Their processes can differ from the typical loan application, but having an account manager is typical.

Online platforms have simplified the application and funding process. This offers a streamlined experience.

Questions to Ask Potential Lenders

• What are your fees and how is your cost funding structure determined?
• Do you offer transactional funding nationwide, excluding Alaska, or are there specific regions you cover?
• How fast can you fund real estate wholesale deals, and what is the typical timeline for deals to close?
• What kind of support do you offer, like, is there a dedicated team?

Tips for a Smooth Transaction

Ensure all your paperwork is prepared and organized. This includes the purchase agreement with the seller and the contract with your end buyer.

Collaborate with a qualified real estate attorney or title company. Most states will allow for one of the two to work in their respective state.

Maintain open and clear communication with all parties involved. This helps make the lending process as smooth as possible, since most wholesalers nationwide have their own system in place.

FAQs about transactional funding for wholesalers in Georgia

How do I get transactional funding?

To secure transactional funding, you first need to identify a property and secure an end buyer. Next, ensure you have a signed contract with both parties.

After that, contact a transactional lender, or several, and submit the required information. Experienced lenders often have streamlined paperwork processes, leading to fast funding options.

The process is normally pretty fast, assuming both parties involved are operating at the highest level of efficiency.

How much does transactional funding cost?

The cost of transactional funding typically ranges from 1% to 3% of the total borrowed amount. However, some organizations may also charge a per diem fee until the closing is finalized.

It’s wise to inquire about all potential fees upfront. We’ll provide you with any extra expenses to be aware of, ahead of time.

This way you can be prepared and it helps you better forecast any future funding deals.

What services are offered by wholesalers offering transactional funding?

The primary service provided in a wholesaler funding scenario is short-term lending solutions. These funds are strictly for double-closing real estate deals.

Another valuable benefit can be access to increased deal opportunities. Many lenders also have additional services and have offers for transactional funding in various other states.

It’s all about how to fund real estate overall.

Is wholesaling illegal in Georgia?

Wholesaling real estate is completely legal in the State of Georgia. However, it’s important to note that certain states, such as Hawaii or New York, have restrictions or outright prohibitions on wholesaling.

Real estate wholesalers in those areas will likely use different business models.

Different rules for the real estate world vary by state.

Conclusion

Transactional funding for wholesalers in Georgia offers a way to get rapid, short-term cash. It eliminates the need to use personal funds to initiate a transaction.

This enables you to pursue more deals. It removes the financial constraints, allowing you to have funding double closings on properties that you have cash buyers for.

While transactional funding may not be the cheapest loan option, its speed is unparalleled. By partnering with the right lender, you can fund a deal quickly and efficiently, unlocking new real estate deals that might otherwise be out of reach, while offering many benefits.