Transactional funding is short-term capital, usually one to three days, that funds the A-B leg of a wholesaler's double close so they never use their own money. The lender is repaid the same day from the B-C sale proceeds. Fees typically run about 1 to 2 percent of the purchase price plus a flat charge, and most deals require no credit check.
Key Takeaways
- Transactional funding lasts one to three days and is repaid the same day from the end buyer's funds.
- It funds the A-B purchase in a double close, keeping the wholesaler's own cash out of the deal.
- Cost is roughly 1 to 2 percent of the purchase price plus a flat fee, with no monthly interest.
- Most transactional lenders skip the credit check and underwrite the deal, not the borrower.
- A signed B-C contract with verified end-buyer funds is the lender's core requirement.
- A proof-of-funds letter is usually included free to help open escrow.
- A double close avoids disclosing your assignment fee, unlike a contract assignment.
What is transactional funding in real estate?
Transactional funding is a same-day loan that lets a wholesaler buy a property and resell it within hours without risking their own capital. It exists for one specific job: bridging the A-B purchase in a double close so the resale to the end buyer can fund and repay it the same day. The loan term is measured in hours or days, not months, which is why lenders price it as a flat fee rather than an annual interest rate.
The mechanic solves a real problem. When a wholesaler locks up a distressed property well below market, some sellers, title companies, or end buyers object to a visible contract assignment that exposes the wholesaler's fee. A double close keeps the two transactions separate, and transactional funding supplies the cash to make the first one happen. According to the National Association of Realtors, distressed and investor purchases make up a meaningful share of all-cash transactions, and speed of close is often the deciding factor a motivated seller weighs. Transactional funding is what makes a same-day, cash-backed close possible for an operator who does not want to tie up personal reserves.
How does transactional funding work for a double close?
Transactional funding works by wiring capital to the title company for the A-B closing, then getting repaid from the B-C closing minutes to hours later. The wholesaler never advances the purchase price; the lender's money is in the deal only for the window between the two closings. Because both closings are coordinated at one title company or escrow office, the choreography is tight and the repayment is effectively guaranteed by the simultaneous resale.
Here is the sequence a typical double close follows on closing day:
| Step | What happens | Who provides the money |
|---|---|---|
| 1. Pre-close | Wholesaler signs A-B contract with seller and B-C contract with end buyer | Earnest money deposit (EMD) only |
| 2. Fund A-B | Transactional lender wires the purchase price to the title company | Transactional lender |
| 3. Close A-B | Wholesaler takes title from the seller (A to B) | Transactional lender's funds |
| 4. Close B-C | End buyer buys from the wholesaler (B to C) | End buyer's cash or financing |
| 5. Repay | B-C proceeds repay the loan plus fee; wholesaler keeps the spread | End buyer's funds |
The single hard requirement is a funded, ready end buyer. If the B-C buyer's financing falls through, the wholesaler is left holding a property funded by a loan due that day, which is the scenario every transactional lender screens against. That is why lenders verify the end buyer's proof of funds before wiring anything. Our step-by-step guide to how wholesale real estate works covers how the contract and buyer pieces come together upstream, and building a reliable cash buyer list is what keeps the C side of the deal dependable.
How much does transactional funding cost in 2026?
Transactional funding in 2026 typically costs 1 to 2 percent of the A-B purchase price, often with a minimum flat fee between roughly 500 and 2,500 dollars. On a 200,000 dollar purchase, that is about 2,000 to 4,000 dollars. Because the loan is outstanding for a single day, there is usually no monthly interest, no origination points stacked on top, and no prepayment concern. You pay the fee, the loan is repaid at the B-C closing, and the deal is done.
A few variables move the price. Larger loan amounts often carry a lower percentage but a higher dollar fee. Same-day back-to-back closings are cheapest; if the lender must leave money out for two or three days because the B-C buyer needs extra time, the fee rises. Some lenders also charge wire fees or a small document fee. The table below shows representative 2026 pricing on three deal sizes; treat these as illustrative ranges, since terms vary by lender and market.
| A-B purchase price | Typical fee (1–2% + flat) | Est. total funding cost |
|---|---|---|
| $100,000 | ~1.5% or $1,500 minimum | $1,500–$2,000 |
| $200,000 | ~1.25% plus wire fee | $2,500–$4,000 |
| $400,000 | ~1% plus flat fee | $4,000–$6,000 |
The cost is real, so the spread has to justify it. If your assignment-equivalent margin on the deal is 15,000 dollars and funding costs 3,000 dollars, the double close still nets 12,000 dollars and keeps your fee private. If the margin is only 4,000 dollars, an assignment is usually the smarter exit. Fee income from either exit is ordinary income reported on IRS Schedule C, so factor taxes into the comparison as well.
Do you need proof of funds for a double close?
Yes, a proof-of-funds letter is almost always required to open escrow, and most transactional lenders provide one at no cost once you have a signed contract. The seller uses it to confirm you can actually perform, which matters most in a distressed or motivated-seller situation where a failed closing could push the owner into foreclosure. The letter demonstrates capital is available for the day of closing, even though the funds are only committed for that window.
A proof-of-funds letter is not a loan approval or a guarantee of financing; it is a statement that the named party has access to sufficient funds to close. Sellers and their agents generally accept a transactional lender's letter the same way they would a bank statement. Keep the letter current and matched to the specific property and price, because agents increasingly verify it. If you are sourcing directly from sellers, a clean proof-of-funds letter is often the difference between winning the contract and losing it to another cash buyer.
Transactional funding vs hard money: what is the difference?
Transactional funding and hard money solve different problems. Transactional funding is a one-to-three-day loan repaid the same day from a simultaneous resale, priced as a flat fee, with no credit check. Hard money is a months-to-years loan for an investor who intends to hold, rehab, or flip, priced as points plus a 9 to 13 percent annual rate, and it underwrites both the borrower and the property. You use transactional funding to complete a double close; you use hard money to buy and renovate a property you plan to keep for a while.
| Factor | Transactional funding | Hard money | Private money |
|---|---|---|---|
| Term | 1–3 days | 6–24 months | Negotiable |
| Cost | 1–2% flat fee | 2–4 points + 9–13% APR | Negotiated interest |
| Credit check | Usually none | Yes | Relationship-based |
| Collateral focus | Simultaneous resale | Property + borrower | Property + trust |
| Best use | Double close / wholesale | Fix and flip / bridge | Flexible acquisitions |
The three sources are complementary, not competing. Many operators use transactional funding on same-day wholesale exits and reserve hard money or private money for deals they intend to rehab. For a deeper comparison of the longer-term options, see our breakdowns of hard money loans vs bridge loans and private money vs hard money lenders. Understanding what private lenders look for also helps you present a deal cleanly regardless of which capital source you tap.
Can you do a double close with no money down?
Yes, a double close funded by transactional lending can be completed with effectively no money down, because the lender covers 100 percent of the A-B purchase price plus most closing costs. The wholesaler's only meaningful out-of-pocket item is the earnest money deposit on the A-B contract, and that is frequently reimbursed at closing. The end buyer's funds do the heavy lifting on the C side, and the transactional loan bridges the middle.
The catch is that no money down does not mean no risk. If the B-C buyer cancels after the A-B closing has funded, the wholesaler now owns a property with a loan due that day and no resale to repay it. That is why disciplined wholesalers never fund the A-B leg until the end buyer's earnest money is hard and their funds are verified. Done correctly, transactional funding is close to risk-free capital; done sloppily, it converts a clean spread into a distressed hold. The discipline is in the sequencing, not the financing.
What is the A-B-C transaction structure?
The A-B-C structure is the naming convention for the two linked closings in a double close. A is the original seller, B is the wholesaler, and C is the end buyer. The A-B transaction is the seller selling to the wholesaler; the B-C transaction is the wholesaler selling to the end buyer. Transactional funding lives entirely inside the A-B leg, and the B-C proceeds are what retire it. The wholesaler briefly holds legal title between the two closings, which is what separates a double close from a contract assignment.
That brief ownership is the whole point. In an assignment, the wholesaler never takes title and simply transfers the contract for a fee that appears on the settlement statement. In an A-B-C double close, the wholesaler actually buys and sells, so the seller sees only the A-B price and the end buyer sees only the B-C price. Neither sees the spread. This matters when a seller might balk at a large assignment fee or when an end buyer's lender prohibits assignments. Our guides on double close vs assignment and the wholesaler exit decision lay out exactly when each structure wins. A handful of items still require care in an A-B-C: title seasoning expectations from the end buyer's lender, RESPA and TRID timing on any financed B-C leg, and FinCEN all-cash reporting thresholds that can apply to certain residential purchases.
Do transactional lenders check credit?
Most transactional lenders do not check credit, because the loan is secured by a simultaneous resale rather than the borrower's balance sheet. The repayment source is the end buyer's funds arriving hours later, not the wholesaler's income or FICO score. That is a structural difference from hard money, where the lender underwrites you and the property because the loan is outstanding for months. In transactional funding, the deal is the collateral.
What lenders do scrutinize is the deal itself. They want to see a signed A-B contract, a signed B-C contract, and verified proof that the end buyer's money is real and ready. Some ask for the end buyer's proof of funds directly. Because the underwriting is deal-based, even a newer wholesaler with thin credit can access transactional funding, provided the resale is solid. That accessibility is one reason transactional funding is the default capital tool for double closings. It removes the borrower-quality gate and replaces it with a deal-quality gate, which is exactly where a good wholesaler's edge already lies.
Frequently Asked Questions
Is transactional funding legal?
Yes. Transactional funding and the double close it supports are legal in most states when properly documented as two separate, arms-length closings. Some title companies and states have seasoning or same-day-funds rules, and a few require the wholesaler's own funds rather than the end buyer's to fund the A-B leg, known as dry funding states. Confirm your title company allows same-day back-to-back closings, and disclose material facts as your state requires. When in doubt, involve a real estate attorney.
What is the difference between wet funding and dry funding states?
In wet funding states, funds are disbursed at the closing table on the day documents are signed, which supports true same-day double closings. In dry funding states, funds are disbursed only after a post-closing review, which can add a day or more between the A-B and B-C legs and raise the transactional funding fee. Knowing your state's rule tells you whether a same-day or a two-to-three-day structure applies.
How fast can transactional funding close?
Once you have a signed A-B contract, a signed B-C contract, and a verified end buyer, transactional funding can be arranged in as little as 24 to 48 hours, and the funding itself happens on closing day. The gating item is rarely the lender; it is coordinating the title company, the seller, and the end buyer to close both legs on the same date. Experienced wholesalers line up the lender early so the capital is not the bottleneck.
Do you need a title company that allows double closings?
Yes. Not every title company or closing attorney will handle back-to-back A-B and B-C closings using the end buyer's funds, so you need an investor-friendly title company that is comfortable with the structure. Ask directly whether they permit same-day double closings and how they handle the source of funds for the A-B leg. Lining this up before you get a property under contract prevents a scramble at the closing table.
Is a double close better than an assignment?
It depends on the spread and the parties. A double close hides your margin and works when a lender or seller prohibits assignments, but it costs transactional funding fees and two sets of closing costs. An assignment is cheaper and simpler but exposes your fee on the settlement statement. As a rule of thumb, use a double close when the spread is large enough to absorb the funding cost or when privacy is essential, and assign when the fee is modest and the parties are comfortable with it.
Can you use transactional funding on a financed end buyer?
Sometimes, but it is riskier. If the C buyer uses a mortgage, their lender may impose title-seasoning requirements that prohibit reselling a property the seller has owned for only hours or days. Many transactional deals therefore work best with a cash end buyer or a private-money-backed buyer. If the end buyer is financed, confirm their lender allows a short seasoning period before you fund the A-B leg.
Founder of Home Pros, operator across 48 markets, closed 300+ investor transactions since 2021. Home Pros sources off-market single-family and small multifamily deals and places them with individual and institutional capital. More about Trevor →
Primary sources: Investopedia, double closing; Consumer Financial Protection Bureau, RESPA (Regulation X); FinCEN, residential real estate reporting rule; Forbes Advisor, wholesaling real estate. This article is educational and not legal or financial advice; consult a licensed attorney and your title company before structuring a double close.