What is Transactional Funding? 

Transactional funding provides short-term financing that enables real estate wholesalers to acquire and quickly resell properties for a profit. 

With transactional funding, wholesalers can obtain a loan to purchase a property and then flip the property to an end-buyer on the same day. The profits from the swift resale are then used to repay the transactional loan.

Key features:

- Short Term: Loans are borrowed and repaid rapidly, usually within a day. 

- Flexible: Funding allows wholesalers to take title and immediately resell.

- Fast Financing: Provides the quick capital needed to close deals swiftly.

- Risk Management: Wholesalers don't tie up their own capital long-term. 

- Increased Buying Power: Allows wholesalers to scale and do more deals.

By providing speedy, short-term financing, transactional funding empowers real estate wholesalers to act quickly on deals. It provides the agility and buying power to maximize profitability.

How Transactional Funding Works

Transactional funding provides financing for real estate investors and wholesalers through private lenders rather than traditional banks. It relies on having an end-buyer already lined up to purchase the property. 

The process involves three key steps:

1. The Lender Funds the Purchase

The wholesaler or investor secures transactional financing to purchase a property from the original seller. The lender provides 100% of the purchase price.

2. The Property is Quickly Resold  

As soon as the wholesaler/investor acquires the property, they immediately resell it to the end-buyer at a higher price. 

3. The Sale Proceeds Repay the Loan

The profits from the sale to the end-buyer are used to quickly repay the transactional loan. The lender is paid back immediately.

This allows wholesalers and investors to act fast on deals without needing upfront capital or tying up assets long-term. The quick resell ensures efficient use of the capital and generates strong returns for the investor.

Transactional funding can facilitate double closes where the buy and resell occur back-to-back. Careful coordination is required to execute this simultaneous exchange effectively. Work with Legacy Capital Resources  and use our transactional funding to streamline your complex wholesale deals. Click here to submit a Funding Request.

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