Over the years, we've witnessed various scenarios where wholesalers have tapped into transactional lenders to facilitate double closings. Some wholesalers are regulars, calling on these lenders for every deal. Others see them as a backup plan for when money gets tight. Then, some play it by ear, deciding on a case-by-case basis.
This blog aims to provide insights into the function of transactional lenders and their role in protecting your wholesaling business.
What Is Transactional Funding?
Transactional funding is a quick loan that real estate investors use for their property deals. Transactional funding is an expedient loan option used by real estate investors for their real estate transactions. Due to its ease of use and speed, it's frequently referred to as same-day transactional funding. This funding makes purchasing a property from one seller and selling it to another buyer on the same day easier for real estate wholesalers. Wholesalers experience less risk and greater financial flexibility when using transactional funding instead of their own funds. This transaction is significant since the wholesaler closes virtually simultaneously with the buyer and seller, purchasing from the seller.
Benefits for Real Estate Wholesalers
The benefits of transactional funding are numerous. First, it reduces the wholesaler's risk by enabling them to close deals without making substantial personal investments. Transactional funding is helpful for first-time investors who might not have a lot of money saved up. Furthermore, because transactional funding is secured by real estate transactions, it is typically easier to get than standard loans. Additionally, it offers speed and flexibility that traditional loans cannot match, making it ideal for the hectic world of wholesaling.
Why Choosing This Financing Method Is Good for Wholesalers
Transactional funding provides financial security and peace of mind by giving you a dependable partner to fund your transactions. Here's why it's beneficial and helps you avoid specific problems:
- No Conflicts with the Buyer or Seller
When wholesaling real estate, sellers might not like the profit you make from the deal, causing them to back out. However, with transactional funding and double closing, this risk is reduced.
Similarly, buyers might want to negotiate a lower price if they know what you paid originally. With double closing, they only see the price you charge them.
- No Conflicts Between Buyer and Seller
Sometimes, sellers feel deceived if the wholesaler (the agreed buyer) doesn't show up on the closing day, causing unnecessary conflict.
Transactional funding allows wholesalers to double close, buying from the seller first and then selling to the end buyer separately. This process ensures that the buyer and seller are not part of the same closing.
Conclusion
Transactional funding is a handy tool for real estate wholesalers, especially when dealing with different state rules. It allows you to manage your money, stay on the right side of the law, and make as much profit as possible while keeping risks low.
At DoubleClose.com, we're all about giving you the best transactional funding solution that suits your situation. With our expertise and constant support, your deals will go off without a hitch.
