What Is Transactional Funding? (Double Closings for Wholesalers)

Transactional funding is very short-term capital that lets a wholesaler or assignor buy a property (the A-to-B closing) and immediately resell it to the end buyer (the B-to-C closing), often on the same day. It bridges the gap with little or none of your own cash.

How does a double closing work?

There are two back-to-back transactions:

• A to B — you buy from the original seller, funded by transactional capital.
• B to C — you sell to your end buyer, and their funds (or their lender's) pay off the transactional loan.

Because the two closings happen together, the money is outstanding for hours, not weeks.

When do you use it?

Use transactional funding when your end buyer's lender will not allow an assignment of contract, or when your purchase contract does not permit assignment. Both closings run through the title or escrow company as separate, fully disclosed transactions, and if your end buyer is financing, their lender needs to know it is a back-to-back closing.

What does it cost?

Pricing is a flat fee rather than an annual rate, because the loan lasts a day. The fee is typically small relative to a healthy spread, and you keep the deal on schedule without tying up your own capital.