If you are an investor or wholesale buyers specializing in real estate properties, REOs, and short sales, you may have a more difficult time securing loans from traditional lenders. Fortunately, there is an option for those looking for worthwhile opportunities in California’s diverse and vibrant real estate market – Transactional funding.
What is Transactional Funding?
This short-term loan alternative is useful when an investor wants to quickly grab an opportunity without selecting into their funds. Transactional lending is a borrowing process where an investor borrows short-term funds to close a deal. It is also known as flash funding, transactional hard money loans or same-day funding. There is no credit score check or down payment required, but the investor must have an end buyer to complete the transaction without any hassles.
Flash funding is popular for investors who want to invest in property for wholesaling without tying up their funds. It usually covers all the costs of the initial purchase while reducing any fees from the profit of the borrower. This means you will not have to bring any of your own money to closing the deal. But the inherent complexity in terms of planning and timing is why this type of loan is best pursued with the help and assistance of legal experts exceptionally qualified in this area. You can also get in touch with Hard Money Loans for the best transactional funding in a short period without any hassle.
How Can Startups Use Transactional Funding to Their Advantage?
Transactional funding wholesaling is used in real estate investment, but the concept itself could be applied to startups. A shareholder essentially leverages the interests of two parties and works as a mediator to arrive at the transaction. Boiling down to the leverage of people and resources is the concept of transactional funding. However, the relationship is key. This means an investor must be the intermediary who finds the interested buyer and convinces the seller to release the property. That’s why having good relationships with venture capitalists, private lenders or financial institutions (who are willing to invest the funds) is essential.
How Does an Investor Qualify for Transactional Funding Wholesaling?
Being suitable for the best transactional funding is different from getting approval for other traditional loans. Flash funding requests are approved or denied based on the strength of the deal and not on the credit score or income of the investor. If you are a startup, you must provide the lender with the signed and executed contracts from the seller and especially from the end buyer to qualify for hard money in California. But why? Because when you get in touch with hard money lenders for this type of funding, they will want to see that the seller and end buyer are locked in and ready to go.
The ease of accessing transactional funding is what entices investors. The process of transaction hard money loan is completed in a short time as it doesn’t require traditional loan underwriting. Plus, an investor doesn’t need to provide proof of employment, credit score proof, and personal collateral to get a flash loan.
What are the Benefits of Transactional Hard Money Loans?
Investors usually use the transactional loan to finance on a time-sensitive investment. However, there are two other reasons why flash funding is more popular among investors.
Allows You to Close the Deal without Using Your Own Money
When you use a third-party transactional lender, it will help save you from having to invest your capital to close the deal. You can hold someone else’s money in exchange for a small fee. The fee is usually 1 to 2 points of the loan; however, it may be well worth the cost to preserve your fund for other investments.
Acts As a Cash Buyer
If you are planning to invest in real estate, you are likely needing investments with good value. In most cases, other shareholders and private lenders consider the same deals and create competition through various offers on the same property. Similar to cash buyers, the best transactional funding gives you 100% capital. When you get in touch with Hard Money Loans for quick close with 100% financing, we give you an edge over your competitors to close the sale quickly.
Hopefully, you have now understood how transactional hard money loans can be applied to the startup and why you should opt for the flash funding if you need quick loans for real estate investment.
Contact Hard Money Loans for the Best Transactional Funding!
At Hard Money Loans, we provide comprehensive transactional hard money loans in California. We have many years of experience in closing transactions that involve flash lending and bridge loan. Our dedicated professionals help connect investors to our vast network of private lenders, helping to facilitate mutually beneficial deals to both parties.
If you are an investor in need of transactional funding wholesaling, or a private lender seeking an investor for lending in California, contact us at +1 (310) 666-8884.