What Honesdale Wholesalers Need to Know About Transactional Funding

Transactional funding is a short-term loan used by real estate wholesalers to facilitate double-closings or simultaneous closings. If you’re a wholesaler in Honesdale, PA, looking to use transactional funding, here are key aspects you need to know:

  1. Purpose of Transactional Funding:
    • Transactional funding is typically used in wholesale real estate transactions where the wholesaler enters into two back-to-back closings. In the first closing, the wholesaler buys the property from the seller, and in the second closing, they sell the property to the end buyer.
  2. Short-Term Nature:
    • Transactional funding is designed for short-term use, usually for a few days or weeks. It is not a long-term financing solution, and the loan is repaid quickly after the second closing.
  3. Criteria for Approval:
    • Lenders providing transactional funding are primarily concerned with the deal’s viability and the likelihood of a successful second closing. They may focus less on the wholesaler’s credit history and financial standing and more on the property’s value and the end buyer’s credibility.
  4. Costs and Fees:
    • While transactional funding can be more expensive than traditional financing, it’s important to understand the costs involved. This may include an origination fee or interest charges for the short-term use of funds. Be sure to clarify all fees with the lender.
  5. Relationship with End Buyer:
    • It’s crucial to have a reliable and committed end buyer lined up for the second closing. Transactional funding relies on the wholesaler’s ability to quickly sell the property to avoid extended holding periods.
  6. Coordination with Closing Agents:
    • Work closely with closing agents or attorneys who are experienced in handling double-closings. Proper coordination is essential to ensure a smooth transition between the two closings and the repayment of the transactional funding.
  7. Legal Compliance:
    • Understand the legal and regulatory requirements related to transactional funding in Honesdale, PA. Ensure that your transactions comply with local laws, and consider consulting with legal professionals to navigate any complexities.
  8. Risk Management:
    • While transactional funding can be a useful tool, it’s important to carefully manage risks. Be thorough in your due diligence, and have contingency plans in case the second closing faces unexpected challenges.

Always seek advice from experienced professionals, such as real estate attorneys or mentors, to navigate the nuances of using transactional funding in your wholesale real estate deals. Understanding the terms, costs, and risks involved will help you use transactional funding effectively in your business.

What do you know about transactional funding? Wholesalers often locate deals with motivated sellers who agree with the arrangement. The wholesaler then locates an end buyer, making a slight profit without being involved in the actual transaction. However, there are cases in which this isn’t always an option; for example, no assignment clauses often force wholesalers to use a simultaneous or double closing. Instead, wholesalers utilize transactional funding for a short duration, the time it takes for the two transactions to close, typically back to back, anywhere from one to five days.

You may be familiar with the term ABC loans. For example, the seller is Party A, and you are party B, who takes the title in the first closing. After that, you will sell the property to an end buyer in another transaction, known as party C. Transactional funding is also known as flash cash or same-day funds. Read on as we explore what Honesdale wholesalers need to know about transactional funding. 

Sound Investment

Honesdale wholesalers need to know about performing due diligence and run the numbers to ensure the investment is sound with any funding source, including transactional funding because a deal is only as good as the investment. Let local professional investors like those at Tristate Holdings 167 Inc. help you locate the right property for your needs; we know the red flags to watch for and can zero in on the best property to bring the highest returns on your investment.

Hard or Private Money Lender

Honesdale wholesalers should understand that transactional funding is when a third-party investor wires the funds directly to the title company, allowing wholesalers to complete a deal and grow wealth without using their funds. You should be aware these funds cannot leave escrow. There is no credit or income check when you borrow these funds. However, you will need to have a purchase contract to confirm that the deal with your buyer is sound for the lender.  Seasoned investors like the pros at Tristate Holdings 167 Inc. can help you locate lenders to pursue this option if necessary.


Another thing Honesdale wholesalers need to know about transactional funding is that by using a double closing, the details are private and unknown to your buyer and visa versa, which keeps your profits from the transactions private. And while it isn’t anyone else’s business, there are still cases where knowledge of these figures has caused emotional difficulties to arise from both sellers and buyers and ended great deals. Working with highly skilled investors, like those at Tristate Holdings 167 Inc., means you can be confident that your transaction will flow smoothly.

Transactional Funding Fees

A transaction funding fee can range from 2 to 12%, which is another thing Honesdale wholesalers need to know about transactional funding.  Delays in closing can add extension fees.

The seasoned professional investors at Tristate Holdings 167 Inc. are familiar with everything Honesdale wholesalers need to know about transactional funding and are happy to help. Talk to one of our pros today, and you’ll see the difference for yourself that working with local investors who care about Honesdale and our neighbors here makes. Save time by working with the full-service team and our network of in-house providers at Tristate Holdings 167 Inc. that can handle everything from locating the best investment for your needs to property management and everything in between. Helping our investors make the highest possible returns on their investments is the passion of the professional investors at Tristate Holdings 167 Inc.. Save money by avoiding costly mistakes because you’re working with professionals for a small fee. And don’t forget to ask about the current inventory of the best investment properties available in Honesdale at Tristate Holdings 167 Inc. Call Tristate Holdings 167 Inc. at 1-(888) 788-7478.

Tristate Holdings 167 is a team of Cash Home Buyers. We Buy Pennsylvania Houses in the following surrounding areas of Allentown, Pennsylvania (Macungie, Bushkill, Nazareth, Saucon, Milford, South Whitehall, North Whitehall, Emmaus, Hellertown, Easton, Hanover, Northampton, Bethlehem, Lehighton, Fullerton, Pottstown, Lansdale, Reading, East Stroudsburg, Phoenixville, Norristown, Horsham), and other areas of Pennsylvania.

Whether you are trying to avoid foreclosure, inherited a property you do not want, dealing with a divorce, or are fed up being a landlord dealing with tenants, we can help. If you need to Sell Your Pennsylvania House Fast, we offer Cash For Homes in Pennsylvania!

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