HRS Transactional Funding Rates

Heritage Realty Services, Inc.

Fee Schedule Examples

HRS transactional funding rates are listed below and the following is our fee schedule for our current funding costs for real estate Transactional Funding through Heritage Realty Services, Inc. and Dave Dinkel or his assigns.

We currently only do Transactional Funding (1 to 3 days) i in the State of Florida and recently started transactional funding in Georgia, referrals are available to hard money lenders in Florida and other states upon request.

HRS Transactional Funding Rates

 1 Point (1%) of the funds needed to purchase the property on any amount up to $500,000.

We fund 100% of this purchase price.

Above this amount, rates are available only by request.

All transactions also have a $50 wire fee.

Actual Examples:


Transactional Funding is for A – B and B – C closing transactions that take place as simultaneously as possible. To fund these transactions we must approve them at least 24 hours in advance of the closings.  Funds to purchase the property due from the end-buyer (“C”) MUST be wired into the closing agent and these funds cleared in their escrow account prior to the A – B closing for the Transactional Funding to be approved.
Transactional Funding is limited to one to three days.  If the closing for the B – C leg takes longer additional rates will apply and these will be equivalent to hard money rates or per diem charges will apply.

How Much Should You Be Paying for Transactional Funding Rates?

I got a call from an excited investor in Georgia asking about transactional funding for a wholesale deal coming up in three days.  As it turned out I went on vacation to Georgia the next day and got back to him a week after he needed the funding.  I knew he had a funder in place so I wasn’t concerned that he wouldn’t close the deal.  He has explained that he also had already paid his funding source some money to do the deal.

When I called the investor back I asked if he had closed his wholesale deal and he said “yes” but he had to pay $2,000 or slightly over 2.0% of his purchase price ($97,000).  He went on to explain how it seriously bite into his small profit ($8,000) on the deal.  I asked why he didn’t assign the contract and he explained that the seller and the closing agent wouldn’t allow him.

So this begs the question, “How Much is Too Much” to charge for the use of same-day transactional funding?  The simple answer is no amount too large if you can’t close a deal where you make a net profit.  But in the real world, the more you have to pay out the more deals you have to do to make the same amount of money!

In many chases the axiom “You get what you pay for” is true.  However, in transactional funding you get the same end product – funds to close.  Sending the money timely is critical and the reputation of the funder is also very important.  By and large most funders who have been in the business are reliable and ethical, but not all.

In the above case, the transactional funder did as he said by providing the funds necessary to close.  His fee was $2,000 for any amount below $100,000 – whether it was $25,000 or $50,000 or $97,000 as in this case.  The investor asked me what I would have charged and I explained our fee is very simple, 1 point (1%) of the Funds Due from Buyer on the A – B HUD Statement or “CD plus a $50 wire fee.

But if you are getting the same end- product (cash to close) shouldn’t the charge for it be pretty close between lenders?   Unfortunately this is not the case with most transactional lenders.  In the above example, the cost of a $50,000 transactional funding can range from $550 to $2,000 or more depending on the lender and how desperate the investor is to close his wholesale deal.

Always try to assign your contract to your end-buyer if possible.  In short sales, REOs and with many listed properties, you may have to double close.  In these cases and in the case of too large a profit, you should use transactional funding if you don’t have your own money.

If you asked what is “Too large a profit” the answer is that the amount is in the eyes of the seller and end-buyer.  It could be $10,000 or less but we prefer to think of $15,000 as a threshold where most sellers and buyers won’t squabble.  But if the price of your property is $25,000 then $15,000 looks enormous!

An “Arbitrary Guideline” to when you should double close your wholesale deal is if the amount of your profit is greater than a Realtor’s commission (6%).  This minimal “profit spread” assumes that the amount of net profit in the deal makes sense to you especially since you will be paying closing costs on two closings.

If you find yourself in this situation where you have a small spread (a few thousand dollars) first explain to your end-buyer that “You’ll agree to his price BUT he has to pay your closing costs on the B – C closing because your spread is so small.  Always pose this counter-offer to your “Cheapo Buyer” AT THE TIME he offers you his price.  If he says “No”, try for another buyer as you have this buyer as a basement price for what you can get.