Transactional funding provides 100% of the funds you need to close a wholesale deal through a same day double closing, including closing costs. No credit check. No appraisal. No down payment. Kestrel Lending puts your transactional funding transaction in front of 20+ hard money lenders so you get competitive terms, multiple offers, and fast funds in 24 to 48 hours. Get Your Rate in 24 Hours.
Transactional funding is a short term loan that provides funds for the A-to-B purchase of a double closing. The transactional funding lender wires funds to the title company or closing attorney on closing day. You (the wholesaler) buy the investment property from the original seller (Seller A), then immediately sell to your end buyer (the B-to-C sale). The sale proceeds from that B-to-C transaction repay the transactional funding loan the same day, typically within hours. The lender's funds are not at risk because the end buyer's money covers the simultaneous resale.
Transactional funding lets real estate wholesalers and real estate investors close transactions without tying up their own funds. This is not a hard money loan with monthly payments and interest rates. It is flash funding (also called same day transactional funding or transaction funding) that lasts only as long as the two transactions take to complete. Most transactional lenders provide transactional funding that covers 100% of the A-to-B purchase price plus closing costs, so the borrower brings zero dollars to the table. Transactional lending is built for speed: no appraisals, no underwriting on the borrower, no hard money loan documentation delays. In other words, the thing that matters is the deal's strength, not the borrower's financial profile. A to B purchase funds pass directly through the intermediary (the title company or closing party) to the seller on your behalf.
Transactional funding makes double closings possible for wholesalers who do not want to use their own funds or assign their deal. This short term financing option is commonly used in real estate investing by investors, wholesalers, and people involved in real estate wholesaling who need to close quickly. Unlike a hard money loan or bridge loan, transactional loans are simply repaid the same day from the end buyer's funds. The B C funds pass to the lender, and your profit is what remains after fees. This is also called a back-to-back resale. Understanding how transactional funding works helps you evaluate whether this product is the perfect fit for your next project.
| Terms | Details |
|---|---|
| Funds Provided | 100% of A-to-B purchase price plus closing costs (transactional funding covers the entire A-to-B leg) |
| Loan Terms | Same day (standard) or up to 30 days (extended transactional funding) |
| Pricing | Typically 1% to 2% of the loan amount (flat fee, no monthly interest rates on same day funding transactions) |
| Down Payment | $0 down payment required |
| Proof of Funds Letter | Free POF letter issued within hours |
| Setup Time | 24 to 48 hours from submission to funds ready |
| Upfront Fees | No upfront fees, no application fees |
| Loan Amount | $10K to $2M+ (varies by transactional funding lender, no limits on number of transactions) |
| Property Types | Single family, multifamily, commercial, land, any asset class |
| Repayment | Loan funds are repaid from B-to-C sale proceeds same day |
Transaction funding terms are straightforward and easy to understand. The transactional lender provides 100% of the purchase funds and pays closing costs on the A-to-B leg. You pay a fee (typically a percentage of the loan amount). There are no monthly interest rates, no monthly payments, and no long term commitment. The borrower does not need to qualify based on credit or employment. Most transactional funding lenders evaluate the asset, the property value, and the contract terms, not the borrower. The lender confirms both contracts, then wires funds to the title company. Funds are repaid the same day when the buyer closes, and the remaining funds pass directly to you as profit. Pricing and fees vary by lender, which is why shopping your transactional funding deal to multiple hard money lenders is an advantage. Getting competing terms and offers from different transactional lenders helps you secure the best deal. The table below shows typical terms, but the true numbers on your deal depend on which lender provides the funds. When evaluating offers, pay attention to the percentage fee, the timeline for approval, and any points charged.
Here is how a same day double close using transactional funding works from start to finish:
The process is fast. From submission to close, most transactional funding transactions work out within 5 to 10 business days. The actual day funding and repayment of funds happens the same day. See how Kestrel places your project.
Here is a worked example of how transactional funding works on a typical wholesale deal with real numbers:
You brought zero of your own money to this transaction. The transactional funding loan covered the entire A-to-B purchase and closing costs. Your end buyer's funds repaid the loan the same day. The $40,750 profit landed in your account without tying up your own capital. That is the math that makes this the best transactional funding option for real estate wholesaling and real estate deals. For more hard money loan examples, see our worked example with real numbers.
Standard transactional funding works when both the seller and the end buyer close the same day. But not all transactions close that quickly. If your end buyer needs conventional financing or the end buyer's financing requires appraisals, the B-to-C transaction may take weeks and the timeline may change. Extended transactional funding covers this gap and provides short term financing for up to 30 days.
Extended transactional funding provides the same 100% funds for the A-to-B leg but holds the loan open for up to 30 days (or six months in rare cases) while the end buyer's financing is finalized. The cost is higher than same day funding because the lender holds funds longer. Expect 2% to 3% of the loan amount plus a per-day interest charge. Extended transactional funding is the right option when your end buyer is not a cash buyer but has approved financing and simply needs more time to close. Think of it as a short term bridge between the two transactions, allowing you to hold the property while the end buyer's loan closes.
Transactional funding is not the only way to finance a wholesale deal or investment property, but it is unlike other options in several key ways. Here is how transactional funding compares to other short term financing products that investors commonly evaluate:
Texas is one of the best states in the country for real estate wholesaling and double closings. Here is what investors need to understand about transactional funding in this state:
Real estate wholesalers have two options for completing a wholesale transaction: assignment or double closing. Assigning means you sell your rights under the purchase agreement to the end buyer for assignment fees. Double closings involve two separate transactions where you actually take title before selling to the end buyer. Some sellers, banks, and asset managers will not accept assignments, especially on bank-owned property, short sale properties, or HUD homes. In those cases, a double closing with transactional funding is the only way to close and collect your profit.
TREC (Texas Real Estate Commission) rules do not prohibit wholesaling, but licensed agents and brokers must follow specific disclosure language. Wholesalers who are not licensed agents can still complete double closings across the state. Understanding these laws and the legal structure of each transaction helps investors place every wholesale deal correctly and avoid problems. In other words, the true advantage of wholesaling in Texas is that the state allows both methods with minimal regulatory barriers, unlike states such as Illinois where the rules create complications for investors. Each party in a Texas double closing (the seller, the wholesaler, and the end buyer) can close through any title company or closing party that offers the service. The market here is favorable for wholesalers who want to lend their efforts to finding deals and let the transactional lender provide the funds.
In Texas, the title company handles both closings. Not all title companies work with double closings or are willing to allow simultaneous closings. You need a title company experienced with real estate wholesaling and transactional lending. The title company must confirm that the buyer's funds can cover the A-to-B purchase on the same day. Ask upfront if they handle same day double close transactions.
Working with the right transactional lenders and a prepared title company is critical. When you submit through Kestrel, we help connect you with transactional funding lenders who lend through closing parties that run double closings every week across the state. Our team handles the hand off between each party (you, the lender, and the closing office) so nothing breaks down on closing day. You do not lose time coordinating between multiple parties because we provide that intermediary role.
Every transactional funding loan approval includes a free proof of funds letter (POF letter). The POF letter confirms that the transactional funding lender has committed funds for your A-to-B purchase. You can present this proof of funds letter to the motivated seller, their agent, or the listing agent to prove you can close quickly.
Proof of funds letters are issued within hours, often the same day you submit. The POF letter is on the lender's letterhead and shows the funds available for your specific transaction. Having a proof of funds letter ready gives you confidence when making offers and helps you secure deals faster. Many wholesalers request a POF letter before they even have an end buyer lined up, allowing them to lock deals and negotiate with motivated sellers from a position of confidence. Proof of funds letters do not cost a dollar and require no upfront fees or documents. This is provided free to help you access more deals and bring offers to the table quickly.
Transactional funding is built for a specific type of real estate investor. Here is who commonly uses this type of short term loan, and the answer to who benefits most may help you understand if it is the right thing for your next deal:
Anyone who meets these requirements is eligible for transactional funding. Check these items before you apply:
If you have a signed deal with a motivated seller and a buyer ready to close, you are eligible and qualify. Submit and get approved fast. Get Your Rate in 24 Hours.
Transactional funding typically costs 1% to 2% of the loan amount as a flat fee. On a $150,000 transaction, expect to pay $1,500 to $3,000 in fees. There are no interest rates on same day transactions, no upfront fees, and no monthly payments. Extended funding adds a per-day charge for longer hold periods of months. Fees are paid from the B-to-C closing proceeds. Pricing compares favorably to hard money loan alternatives and is not expensive relative to the profit on each transaction.
No. Transactional funding lenders do not require credit checks. Approval is based on the transaction: a confirmed A-to-B and a verified end buyer. Your credit score, employment, and personal finances are not involved. This makes transactional funds accessible to new investors, wholesalers, and small startups who are finding their first real estate deals.
If the end buyer backs out, the transactional funding lender will not wire funds for the A-to-B purchase. The lender requires a confirmed end buyer before providing funds. If the end buyer cancels after the A-to-B close, extended transactional funding gives you up to 30 days to find a replacement. Without a ready buyer, the deal does not close. Having a committed cash buyer helps you avoid losing the transaction and your profit. It is also common for experienced wholesalers to have a small number of backup buyers on hand for every deal.
This type of funding is designed for double closings, not assignments. If you are assigning, you do not need loan funds because you never take title to the property. Transactional funding is for deals where you must close the A-to-B purchase before selling to the end buyer. Assignment fees work differently. If the seller or property does not allow assignments, a double closing with transactional funding is the way to complete the wholesale deal. In a word, some wholesalers call this "the only option" when an assigned contract is not allowed by the seller, allowing them to still close the B to C transaction and collect their profit.
Most transactional funding lenders issue a proof of funds letter the same day you submit. Some lend and provide a POF letter within hours. The letter confirms funds are available for your A-to-B purchase. Wholesalers use the proof of funds letter to secure deals with motivated sellers quickly and provide credibility to sellers who need to see verified funds before accepting an offer.
Yes. Transactional funding works anywhere in Texas where a title company can handle double closings. Kestrel Lending connects you with transactional funding lenders in Houston, Dallas, San Antonio, Fort Worth, Austin, and every other market in the state. We broker business-purpose loans on investment property only.
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