Mastering Transactional Funding

What's Inside the Playbook

Wholesalers and creative real estate investors use transactional funding to close deals when they cannot assign the contract or need to keep their assignment fee private. This playbook covers the core strategies.

1. The Double Close (A-B, B-C)

In a double close, you (the wholesaler) actually purchase the property from the seller (A-B transaction), and then immediately sell it to your end buyer (B-C transaction).

• Why use it: Hides your profit margin from the seller and end buyer. Required when assignments are not allowed (e.g., REO properties, HUD homes).
• How it works: A transactional lender provides the funds for the A-B close. Once the B-C transaction closes (usually the same day), the lender is paid back plus their fee.

2. Earnest Money Deposit (EMD) Funding

Sometimes you need to put down a significant earnest money deposit to secure a lucrative contract, but you do not want to tie up your own capital.

• Why use it: Allows you to lock up larger deals or multiple deals simultaneously without draining your liquidity.
• Requirements: Lenders typically require a solid end-buyer in place or a highly favorable purchase price to mitigate risk.

3. Stack / Morby Method

A creative financing strategy where a property is purchased subject-to the existing mortgage, but the seller requires cash at closing, which is funded by a private lender in a second position.

• Why use it: Allows you to acquire properties with low-interest existing debt while still satisfying the seller's need for immediate cash.

Need transactional funding?

We can help fund your double close or EMD. Submit your deal to get started.