What Is Transactional Funding
By Pierre Mouchette | Bits-n-Pieces
Transactional funding is a short-term loan used to fund consecutive real estate closings. This loan is made to a real estate investor planning to do what is referred to as a quick flip.
Transactional funding is often explained where transactional funds are used between when the original property owner signs the closing documents and the time the end-purchaser signs closing documents. Transactional funding is defined by the timeline the buying investor needs money for the “A – B transaction” to be funded.
The buyers and sellers in the transaction are designated with the letters “A” (original property owner and seller), the investor “B” (both a buyer and seller), and the final buyer “C,” who will be the ending owner of the property.