Learn how real estate investors can leverage transactional funding in a double closing to maximize profits without using their own capital. Discover the step-by-step process for success.
Real estate investors can significantly benefit from leveraging transactional funding in a double closing. Also known as a “double closing,” this financing solution provides short-term loans to wholesalers who purchase and quickly re-sell a property on the same day, without needing to use their own capital.
Transactional funding allows real estate investors to facilitate the acquisition and resale of properties quickly and efficiently. Here’s a step-by-step guide on how investors can use transactional funding in a double closing:
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Identify the Need for Funding: Recognize when external financing is necessary to bridge the gap between purchasing the property from the seller and reselling it to the end buyer.
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Engage a Transactional Funding Provider: Partner with a lender that specializes in transactional funding for real estate transactions. Make sure the provider has experience handling double closings.
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Secure Funding Approval: Work with your funding provider to gain approval for the financing required for the initial purchase. Approval is typically based on the deal’s profitability rather than the investor’s credit score.
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Execute the Purchase Agreement with the Seller: Enter into a purchase agreement with the seller, ensuring the terms align with your funding provider’s conditions.
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Arrange the Double Closing: Simultaneously set up a separate agreement with the end buyer. Coordinate the timing of both closings to ensure a seamless process.
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Leverage Transactional Funding for the Initial Purchase: Use the short-term loan provided by the transactional funding provider to complete the purchase from the seller.
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Transfer Ownership to the End Buyer: Without using your own funds, transfer ownership of the property to the end buyer, who will then pay for the property and cover the cost of the transactional funding.
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Complete the Double Closing: Execute the double closing and finalize all necessary paperwork. The end buyer’s funds are used to repay the loan, and you, as the investor, keep the profit.
Transactional funding offers real estate investors a great opportunity to maximize profits without tying up their own capital. It’s essential to carefully evaluate the terms, fees, and the reputation of the funding provider to ensure a successful double closing transaction.
Professional title services, like a title search and title insurance, can help you have a safer and more successful real estate process. Contact Title Junction, LLC at (239) 415-6574 for more information.
Title Junction is a full service real estate title company serving the area of Fort Myers, Cape Coral and the entire state of Florida since 2005. The company handles a number of real estate title services for both commercial and residential properties.
Have questions? Give us a call at 239.415.6574.
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