Quick answer: Transactional funding is a short-term loan that lets a wholesaler buy a property and resell it to an end buyer the same day in a double close. The lender funds the A-to-B purchase and is repaid from the B-to-C buyer's funds, usually for a flat or percentage fee. Use title companies that allow it. DispoKey matches off-market contracts with buyers within 72 hours, 60/40 in your favor.
- You need a signed end-buyer contract before most lenders fund.
- Confirm your title company handles same-day double closes.
- Verify every wire instruction by phone.
What is transactional funding?
Transactional funding is money lent for a matter of hours so a wholesaler can complete a double close. In the first closing (A to B), you buy from the seller using the lender's funds. In the second closing (B to C), your end buyer purchases from you, and the lender is repaid from those proceeds.
Wholesalers use it when an assignment is not allowed, when the seller or buyer prefers not to see the assignment fee, or when the contract terms make a double close cleaner. Our guide comparing a double close vs. assignment explains when each fits.
How transactional funding works, step by step
- Contract the property with the seller (A to B).
- Sign the end buyer (B to C) with proof of funds and earnest money.
- Apply with the lender, sending both contracts, title contact and the buyer's proof of funds.
- Title prepares two settlement statements and confirms the B-to-C buyer's funds are ready.
- Lender wires funds for the A-to-B closing.
- B-to-C closes, and the lender is repaid with its fee from your proceeds.
Many lenders will not fund unless the end buyer's money is already at title.
How much does transactional funding cost?
Lenders usually charge a flat fee or a percentage of the amount funded, plus small processing charges. You also pay for two closings: two sets of title and settlement fees, recording and any transfer taxes in both transactions where they apply.
The illustrative example in this guide shows how a $28,000 spread shrinks after funding and duplicate closing costs. Price your deal with those costs in mind using our wholesale pricing guide.
| Line (illustrative double close) | Amount |
|---|---|
| A-to-B purchase price | $142,000 |
| B-to-C sale price | $170,000 |
| Gross spread | $28,000 |
| Transactional funding fee (2%) | -$2,840 |
| Extra closing costs on A-to-B side | -$3,100 |
| Net to wholesaler | $22,060 |
Title company and lender requirements
Not every title company handles same-day double closes, and some lenders and states add rules about how quickly a property can be resold. Ask before you contract:
- Will you close both sides the same day?
- Do you accept transactional funding, and from which lenders?
- What do you need to see from the end buyer, and when?
- Who prepares each settlement statement?
Title companies issue Form 1099-S reporting for many real estate sales, so expect each closing to be reported as its own sale.
Protecting the wires
Double closes move large wires on tight timelines, which makes them a target for fraud. The FBI warns that business email compromise schemes often target real estate transactions by sending fake wire instructions.
Verify every wire instruction by calling a known phone number, never one in the email. Confirm receipt with title before you tell anyone the funds are sent.
When should a wholesaler use transactional funding?
It fits when your contract cannot be assigned, when the fee is large enough that a buyer may balk at seeing it, or when the seller wants a single, direct buyer on paper. It is less useful on thin spreads, where two sets of closing costs and the funding fee eat the profit. Keep your earnest money terms and timelines realistic either way.
Disclosure and state rules
Some states regulate how wholesalers market contracts or require disclosure of your role. Read your state's real estate commission rules before marketing a contract and use clear written disclosures with sellers and buyers. Our guide is wholesale real estate legit covers the basics.
Checklist before you request funds
- Signed A-to-B and B-to-C contracts with matching property details.
- End buyer's proof of funds and earnest money receipt.
- Title company confirmed for same-day double close.
- Both settlement statements reviewed, including the funding fee.
- Closing times scheduled so the B-to-C funds are ready.
- Wire instructions verified by phone.
Send the lender a complete file at once; missing documents are the most common reason a same-day close slips to the next day.
Common transactional funding mistakes
The usual problems are avoidable: an end buyer without real funds, a title company that learns about the double close on closing day, settlement statements that do not match the contracts, and a spread too thin to cover two closings. Line up each piece days ahead, and keep a backup buyer if you can.
Transactional funding vs. using your own cash
If you have the cash, you can fund the A-to-B side yourself and skip the lender's fee. The trade-off is risk: if the end buyer fails to close, your money is now tied up in a property you own. Funders accept that risk only because the buyer's funds are already at title.
JV your deal with DispoKey instead
If your challenge is finding the end buyer, submit your off-market contract to DispoKey. We match it with vetted cash buyers within 72 hours, split the fee 60/40 in your favor and charge $0 upfront. On-market deals are not accepted. Submit a deal or text (802) 618-0015 with your DK ID.
When DispoKey may not be your best option
If you already have a committed end buyer and only need same-day money, a transactional lender alone may be enough. We fit best when you need buyers fast.
Key takeaways
- Transactional funding pays for the A-to-B side of a same-day double close.
- Most lenders require the end buyer's funds at title first.
- Two closings mean two sets of costs.
- Verify every wire instruction by phone.
Frequently asked questions
What is transactional funding in real estate?
A same-day loan that funds a wholesaler's purchase in a double close and is repaid from the end buyer's funds.
How much does transactional funding cost?
Lenders typically charge a flat fee or a percentage of the amount funded, plus fees for two closings.
Do all title companies allow double closes?
No. Ask before you contract whether they close both sides the same day and accept your lender.
Can DispoKey help if I can't find a buyer?
Yes. DispoKey matches off-market contracts within 72 hours with a 60/40 split favoring you.
