Transactional Funding | Real Estate Investors



What Are the Requirements of Transactional Funders?


The requirements of transactional funding lenders vary but only slightly. In transactional funding transactions, the money loaned to the investor covers the initial purchase of the subject property. This is the so-called first leg of the transaction of the A – B leg. In this designation, the “A” entity is the original property seller and the “B” entity is the investor.


The second leg of the transaction is the so-called “B – C” leg. The designated “C” buyer is the end-buyer who will actually take possession to the property when the closing is done. In reality the property can be resold or flipped many times before the “C” buyer is the final owner. In these cases, each of the investor buyers is designated by another letter – “C, D, E, F and so on. This second leg of the transaction has little or nothing to do with the transactional funding except for the money that must be wired from the actual end-buyer (“C”) to close the deal.


The transactional funder usually wants to see the HUD-1 Closing Statements for both legs of the transaction, information about who the investor is and who the closing agent is for the transaction as well as having the investor and closing agent sign a Letter of Understanding.


This Letter of Understanding is a legal document that states the terms that the investor and the closing agent have to fulfill before and after the closing. These requirements usually include that the lender’s funds not be used for the A – B leg until all documents have been signed by all the parties involved in the transaction and the funds from the end-buyer (C”) are cleared funds in the closing agent’s escrow account.


In summary, the transactional funder has minimal requirements that should be easily satisfied by all parties to the transaction. If any party to the transaction is not willing to wire their funds, sign an agreement about disbursing the transactional funds and the time periods involved when the closing agent can hold the funds, the transactional funder may cancel or withdraw his funding.

About Dave Dinkel 27 Articles
Dave Dinkel graduated from the University of Florida in 1968 with a BS in Chemical Engineering. He initially worked for a petrochemical research and development company in Illinois. Later he entered the financial arena as a stock and commodity broker with Merrill Lynch.While a stock broker he became a Certified Financial Planner and later started his own brokerage firms and stayed in the financial services industry for 22 years before retiring to pursue his love of real estate investing. After retirement, and because of his interest in business start-ups, he worked with a small company for a few years while driving their sales from under $12,000,000 to over $150,000,000 annually before going back to full-time real estate investing.Dave Dinkel has been a national platform speaker, contributor to local real estate clubs, mentor and consultant to numerous real estate investors and all the while running his own real estate business. Mr. Dinkel received the following degrees or designations: BSChE, FINOP, CFP, MSRP, RSP, RR, ROP, SROP, MGA, GA, Certified Estate Planner, Licensed Mortgage Broker, and Licensed Insurance Agent. He is often referred to as the “Teacher of Teachers” and his Mentoring continues to produce Students who go on to be national real estate "Gurus". .He has been a real estate investor since 1975 and recently received the first-ever Lifetime Achievement Award for Contribution to the Real Estate Investing Community. While being active in real estate investing for over 40 years, he and his wife Nancy have been married for over 52 years. He is most well known for the development of his Mentoring Program that has been called, "The Best Mentoring Program in the Country" which he continues today.In addition to his Mentoring Program, he started a full-service transactional funding Program so that new investors had the ability to do deals with no money of their own. He challenged the funding industry by making borrowing money very simple with his "One Point Funding Program" which has revolutionized the transactional funding industry and made millions of dollars available to investors who otherwise could not have afforded it. Currently his transactional funding is only available in Florida.Get more information about his real estate investing mentor program at