Transactional Funding
Wholesaling & Deal SourcingTransactional funding is very short-term financing — often same-day to a few days — used to fund the buy side of a back-to-back “double close.” It is most common in wholesaling and flipping: the funder puts up the cash to close A→B, and is repaid within days when the property immediately resells B→C to the end buyer.
How it works. It lets a wholesaler close both transactions without using their own capital, capturing the spread between the two prices. The cost is a flat fee or just a few days of interest, because the money is out for such a short time. Some investors skip the transactional lender entirely and self-fund these closings from a first-lien HELOC line instead.
The dollar cost is small precisely because the loan lasts only days — but it hinges on having a lined-up end buyer ready to close. If that resale falls through, you are suddenly holding a property you financed to flip, with the funding due almost immediately. Never take transactional funding without the C-side buyer already committed.
Example. A wholesaler funds a $300,000 purchase for three days. At 7%, three days of interest is roughly $170 (plus any flat fee) — repaid the moment the end buyer’s purchase closes. Using a HELOC line for the same three days costs about the same, and keeps the fee in-house.
Compare it with keeping the contract instead in the wholesale assignment fee, and see the remote workflow in virtual wholesaling.