Finding the right transactional funding lender can transform your real estate investing strategy, allowing you to close deals quickly without tying up your own capital. Whether you’re navigating earnest money deposits (EMD), double closings, or seller carryback financing, partnering with a reliable lender is essential. Let’s explore everything you need to know to choose and work with transactional funding lenders, including detailed insights into Oakstone Lending’s transparent and competitive offerings.
What Makes a Top-Tier Transactional Funding Lender?
The best transactional funding lenders offer speed, reliability, and clear terms. These qualities are critical for real estate investors working on time-sensitive deals, such as wholesale flips, back-to-back closings, and creative financing transactions.
Key Features of Leading Transactional Funding Providers
When choosing a lender, look for:
- Fast Approval Process: Approvals typically within 24-48 hours.
- Transparent Fee Structures: Flat-rate fees with no hidden costs.
- Minimal Documentation: Simplified requirements to expedite the process.
- No Credit Checks or Income Verification: Approval is based on the deal, not your personal finances.
- High Funding Limits: Capacity to fund deals from a few thousand to multi-million-dollar transactions.
Understanding Transactional Funding Costs and Fees
Oakstone Lending specializes in three primary funding solutions, each with clear and competitive fee structures tailored for real estate investors:
EMD Lending
Earnest Money Deposit (EMD) lending ensures you can secure deals without tying up your own funds.
- Flat Return Rate: 40% return on all EMD lending deals.
- Minimum Return: $2,000 minimum on smaller deals.
- Non-Refundable Fee: $250 transaction coordinator fee, paid upfront.
- Terms: If the deal closes, Oakstone Lending receives the initial amount plus 40%.
Example: If you borrow $5,000 for an EMD, you would repay $7,000 ($5,000 + 40%) upon deal closure.
Double Close Funding
Double closings require precision and speed, making a dependable lender crucial.
- Flat Fee: 1.5% fee on double closings with at least one week’s notice.
- Rush Fee: 1% additional fee for expedited funding.
- Minimum Return: $2,000 minimum on smaller deals.
Example: If you need $100,000 for a double closing, the fee would be $1,500 (1.5%). If expedited, an additional $1,000 (1%) rush fee would apply.
Seller Carryback Funding
Seller carryback deals require flexibility and quick turnaround.
- Flat Fee: 2.5% fee on all seller carryback deals with at least one week’s notice.
- Rush Fee: Additional charges may apply for expedited funding.
- Minimum Return: $2,000 minimum on smaller deals.
Example: For a $500,000 seller carryback deal, the fee would be $12,500 (2.5%), resulting in a total repayment of $512,500.
How to Qualify with a Transactional Funding Lender
Transactional funding focuses on deal structure rather than personal finances. At Oakstone Lending, here’s what you’ll need:
Essential Documentation Requirements
- Valid Purchase Contract with Seller (A-B Contract): Outlines the initial transaction.
- Valid Sales Contract with End Buyer (B-C Contract): Demonstrates the deal with the end buyer.
- Proof of End Buyer’s Funds: Ensures the buyer has the capital to close.
- Title Company or Attorney Information: Details of the transaction facilitator.
- Entity Documentation: Required if using an LLC or similar structure.
The Transactional Funding Process Explained
Working with Oakstone Lending involves a seamless and transparent process:
- Submit Contracts (A-B and B-C): Provide deal documentation for review.
- Pay Non-Refundable Fees (if applicable): Ensure your transaction coordinator fee is covered.
- Receive Approval: Expect approval within 24-48 hours for most deals.
- Complete Paperwork: Finalize all necessary agreements.
- Close the Deal: Execute back-to-back transactions with confidence.
Choosing the Right Transactional Funding Partner
When evaluating lenders, focus on these key criteria to ensure a smooth funding experience:
Critical Selection Criteria
- Experience: Look for a lender with a proven track record in transactional funding.
- Coverage: Ensure the lender operates in your state or target market.
- Transparency: Fee structures should be clear and upfront.
- Speed: Fast approvals and disbursements are essential for time-sensitive deals.
- Support: Responsive customer service can resolve issues quickly.
Common Pitfalls to Avoid with Transactional Funding
Even with top-tier lenders, challenges can arise. Avoid these common mistakes:
- Hidden Fees: Ensure all costs are disclosed upfront.
- Unrealistic Timelines: Provide sufficient notice for approvals to avoid delays.
- Poor Communication: Keep open lines of communication with your lender and title company.
- Inexperienced Partners: Work with lenders familiar with double closings and creative financing.
Maximizing Success with Transactional Funding
To get the most out of transactional funding, follow these best practices:
- Build Relationships: Establish rapport with multiple lenders for flexibility.
- Understand Terms: Clarify all fees and repayment conditions before proceeding.
- Be Prepared: Maintain organized documentation for faster approvals.
- Communicate Effectively: Keep all parties informed throughout the process.
- Plan Ahead: Allow adequate time for approval and funding to avoid rush fees.
When to Use Transactional Funding vs. Other Options
Transactional funding is ideal for scenarios that demand speed and flexibility.
Ideal Situations for Transactional Funding
- Double Closings: Back-to-back transactions requiring temporary funds.
- Assignment Restrictions: Deals where assignments are not permitted.
- Urgent Purchases: Time-sensitive opportunities requiring immediate action.
- Wholesale Deals: Transactions with a guaranteed end buyer in place.
- Creative Financing: Deals involving EMD, seller carrybacks, or other unique structures.
Future of Transactional Funding
The transactional funding industry is evolving to meet the needs of modern investors. Key trends include:
- Digital Innovation: Streamlined applications and faster approvals via online platforms.
- Competitive Rates: Increased competition is driving down fees.
- Broader Coverage: Lenders are expanding to new markets nationwide.
- Enhanced Security: Improved measures to safeguard client funds and data.
Closing Thoughts
Partnering with the right transactional funding lender can unlock unparalleled opportunities in real estate investing. With transparent fee structures, quick approvals, and competitive terms, Oakstone Lending stands out as a trusted partner for EMD lending, double closings, and seller carryback financing.
By understanding your funding options and preparing your documentation in advance, you can confidently navigate even the most complex real estate transactions. Ready to take the next step? Contact Oakstone Lending today to learn how we can help fund your next deal with speed and reliability.
