Transactional Funding – A Guide for Real Estate Investors

What is Transactional Funding?

Transactional funding is a short-term loan used by real estate investors to facilitate back-to-back property closings. This financing allows investors to purchase a property and resell it immediately—often on the same day—without using their own funds.

This funding method is particularly useful for wholesalers and fix-and-flip investors who need temporary capital to complete a transaction before securing a long-term buyer. Unlike traditional loans, transactional funding is based on the deal's structure rather than the investor’s creditworthiness.

How Does Transactional Funding Work?

The process of using transactional funding typically involves these steps:

1. Identify a Profitable Deal: An investor secures a contract to purchase a property at a below-market price.

2. Secure an End Buyer: The investor finds a buyer (B) willing to purchase the property at a higher price.

3. Obtain Transactional Funding: A lender provides short-term funds to complete the initial purchase from the seller (A).

4. Back-to-Back Closing: The investor (you) closes the purchase with the seller using transactional funding, then immediately resells the property to the end buyer (B).

5. Repayment of the Loan: The funding is repaid in full upon completion of the second transaction.

Because the loan is repaid in such a short timeframe (often within 24 hours), lenders do not require credit checks or personal guarantees—the property and deal structure serve as collateral.

Who Can Benefit from Transactional Funding?

Transactional funding is ideal for:

• Real estate wholesalers flipping contracts quickly.

• Fix-and-flip investors who want to secure deals without tying up cash.

• Short-term real estate investors who need quick access to capital.

• Investors with limited liquid funds who want to expand their business.

This type of funding is especially useful in competitive markets where having immediate access to capital gives investors a significant advantage.

Benefits of Transactional Funding

✅ No Credit Check Required – Loan approval is based on the deal, not personal financial history.
✅ 100% Financing Available – Cover the full purchase price without needing your own capital.
✅ Fast Approvals & Same-Day Funding – Expedite your closings and seize investment opportunities.
✅ Minimal Risk – Since the loan is repaid within days, there's no long-term financial obligation.
✅ Ideal for Wholesalers – Allows investors to flip contracts without upfront cash.

By leveraging transactional funding, investors can close more deals, increase profits, and reduce capital constraints.

How to Qualify for Transactional Funding

To get approved for transactional funding, investors typically need:

• A signed contract to purchase a property.

• A verified end buyer ready to complete the resale.

• A clear transaction structure showing the deal’s feasibility.

• A reputable title company to handle the back-to-back closing.

Unlike traditional loans, no personal assets, credit history, or income verification are required—approval is strictly based on the deal.

Common Questions About Transactional Funding

1. How much does transactional funding cost?

Fees typically range from 1% to 3% of the loan amount, depending on the lender and deal structure. Since the loan is repaid within 24-48 hours, interest charges are minimal compared to other short-term loans.

2. Can I use transactional funding without an end buyer in place?

No. An end buyer must be secured before applying for transactional funding. This ensures that the back-to-back closing will be completed and the lender is repaid immediately.

Is Transactional Funding Right for You?

If you’re a real estate investor looking to close deals quickly without using your own money, transactional funding is an excellent tool. It allows you to secure properties, flip contracts, and maximize investment opportunities with minimal risk.

Need transactional funding for your next deal? Centrifund offers fast approvals, competitive rates, and reliable funding solutions. Get started today!