Transactional funding, also known as "flip funding" or "same-day funding," is a type of short-term funding used in real estate transactions. It is a way for investors to quickly and easily obtain the funds needed to purchase a property, with the goal of reselling it for a profit. In this quick guide, we will explore what transactional funding is, how it works, and why it is a valuable tool for real estate investors.
When an investor finds a property that they want to purchase and flip, they often need the funds quickly in order to secure the deal. Traditional funding methods, such as a mortgage or a loan, can take several weeks or even months to process.
Transactional funding, on the other hand, can provide the funds within a matter of days. This is because transactional funding is not a loan and does not require a credit check or proof of income. Instead, it is a form of temporary financing that is used to purchase a property with the intention of reselling it.
To obtain transactional funding, the investor will typically work with a transactional funding provider, such as Junegrass Lending. The investor will provide the funding provider with all of the necessary information about the property, including the purchase price and the estimated resale value. The funding provider will then review the information and, if they are satisfied, will provide the investor with the funds needed to purchase the property.
One of the key benefits of transactional funding is that it allows investors to move quickly on a deal. This can be especially valuable in a hot real estate market where properties are selling fast.
It also allows investors to purchase properties that they may not have been able to afford with traditional financing methods.
Additionally, because transactional funding is not a loan, there is no debt incurred and no long-term obligation. This makes it a great option for investors who are just starting out and may not yet have established credit or a strong income.
In conclusion, transactional funding is a valuable tool for real estate investors looking to quickly and easily obtain the funds needed to purchase and resell properties. It allows investors to move quickly on deals, purchase properties that they may not have been able to afford with traditional financing methods, and avoid long-term debt.
If you are considering transactional funding for wholesalers, be sure to work with a reputable provider such as Junegrass Lending. Contact them today to learn more about how they can help you succeed in the real estate market.