Transactional Funding Versus Hard Money

About the author : Dave Dinkel

Transactional funding and hard money differ greatly.


  • Interestingly, most hard money lenders will not do transactional funding because they consider it too risky, and in some cases, they are correct.
  • Let’s compare the main aspects of both types of lending:
  • What we have is a comparative analysis of the items a hard money versus the transactional funding.
  • First of all credit score – for hard money there is a minimum required by every hard money lender; for transactional funding, none.
  • Bankruptcy – hard money likely not okay; transactional funding, it’s okay.
  • Funds how much – hard money lenders fund 75 to 90%, while transactional funding is always for 100%.
  • Funds Repairs – hard money lenders fund 70 to 100% of repair costs, while transactional funders fund none.
  • Function of ARV – for hard money lenders yes, transactional funders no.
  • Appraisal – hard money yes, transactional funders no.
  • Inspection – yes for hard money, no for transactional funding.
  • Extensive documentation – yes for hard money, no for transactional funding.
  • Need time to fund – hard money 10+ days, transactional funding possibly same day.
  • Repayment time – usually 12 months plus or minus for hard money, same day for transactional funding.
  • Cost – hard money has interest, closing costs and junk fees; transactional funding 1% plus a $50 wire fee total.
  • Experience – hard money much preferred, transactional funding doesn’t matter.
  • Failure rate at closing – for hard money 35 to 45%, transactional funding 5 to 10% failure
  • These two funding types often come together for closings where an investor is purchasing a property from a property owner and reselling it to an investor who is reselling it, holding it for rental, or for rehabbing it.
  • In this case, the investor uses transactional funding to purchase the property, and the investor end-buyer uses hard money to buy and hold the property.
  • Transactional funding allows wholesalers to buy and sell without having any more than the Earnest Money Deposit required by the seller which makes it an extraordinary tool for investors.


Keyword terms – Transactional Funding Differences, Hard Money Differences, Hard Money and Transactional Funding Comparison, Transactional Funding Versus Hard Money

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About the author : Dave Dinkel