What is Transactional Funding?

If you’re wondering, “what is transactional funding?” you are not alone. It’s a practice that has been around for some time, but it’s not well known outside of real estate and investment circles.

The staff at Best Transactional Funding has more than 44 years of experience in the field, and we’ve decided to create a handy introduction to what it’s all about.

The first thing to know is that transactional funding is a process that allows investors to make real estate deals quickly by relying on money provided by a funding partner. If you are working with us, for example, we supply you with the money for your purchase of a property that already has an end-buyer.

You, the investor (known in these deals as B) use the money for usually less than a day as you close with the seller (A) and then later in that same day, the end-buyer (C) closes.

A very simple example can be seen in this scenario: You are a homeowner that wishes to sell your home to a prospective buyer, but the bank still has money owed to it that must be paid before any deal can go ahead. A transactional funding loan allows you to pay the bank so that you can then sell the property to the end-buyer.

As we stated, the previous example is bare-bones, but we hope it’s enough to provide an idea of how this funding works. We will cover more in further blog posts, so check back soon.

If you would like any further clarification or have any other questions, please feel free to give us a call (954) 274-1003