FAQs

1.  Are there any credit, income, asset or employment requirements I need to qualify for transactional funding or a proof of funds letter?

No

2.  Who is going to be the transactional funder and/or issue the proof of funds letter?

We are going to submit your request to the biggest transactional funders across the country and they are going to fight for your business.

3.  What are the fees for using transactional funding?

The fees can range from 1.75% on the low end to as much as 5% or more for riskier deals.  In addition, many also charge a flat processing fee in the $395 range.  Fees vary based on states (California is usally more expensive because the funds are tied up a few days longer), funding amounts (many charge a $2000 minimum on any deals below $100,000 and increase above $1,000,000), track record (if you are working with the transactional funder for the first time, they may charge slightly more than on future deals) and the length of time the funds are in process (with the advent of the 30,60 and 90 day fundings, the percentage increases as the length of time the funds are tied up increases).

4.  What are the stipulations for obtaining a proof of funds letter?

You must use the transactional funder to fund your deal and many charge a one time set up fee.

5.  Can I get transactional funding if I don’t have a buyer lined up to buy my deal?

No, that is the collateral the transactional funder uses to protect themselves.

6.  Does this work in all states?

Yes, all 50 states.

7.  What happens if the 1st (A to B) transaction closes but the 2nd (B to C) transaction doesn’t?

In most cases, depending on how the paperwork is drawn up with the transactional funder.  With the new 30, 60, and 90+ day funding, the transactional funder becomes the owner, but for the traditional back to back closing scenario, you would actually become the owner with no loan against the property.  That would be a real problem for the transactional funder.  Obviously the transactional funding company is going to usually only submit their funds after they are certain the 2nd (B to C) transaction is for sure going to close.

8.  If the deal doesn’t go through, am I charged the funding fee?

We have never seen where any transactional funding company has ever done this before.

9.  What is the minimum and maximum funding limits?

As low as $10,000 all the way to $100M or more.

10.  Which closing company do I use?

You can choose any closing company, title company or closing attorney you would like.  Many transactional funders also have their favorite companies they prefer to work with that they can refer you to as well (if you need it).

11.  How quickly can a deal be funded?

24 hours is possible although it is much better to give 72 hours or more lead time.

12.  What types of real estate deals can be funded?

All types of real estate deals including residential, bulk REO and commercial as well as even non-real estate deals such as commodity trading like oil.

13.  Does transactional funding cover all the costs on the 1st (A to B) closing so that I don’t have to have any money out of my pocket?

Yes, that is correct.  No money out of your pocket.  The transaction funds are meant to cover all of it.

14.  Does a transactional funder also lend money for rehabs or an end buyer needing a mortgage?

No, transactional funders use the fact that a new buyer is already in place to purchase the property as their collateral to protect themselves.