DLS Direct - Wholesaler Transactional Loans

Transactional funding, often referred to as wholesaler financing or A-B-C funding, is a type of short-term financing for investors who are looking to do quick house flips or wholesale deals by structuring a same-day closing or “double closing”.

Transactional Funding is typically needed in three scenarios:

1) If you are the buyer on a purchase contract that cannot be assigned to a third party, for example bank owned properties or government-owned (HUD, FHA, Fannie Mae, etc) properties.

2) Some state laws do not allow purchase contracts to be assigned.

3) If you want to maximize your wholesale markup. Buyers typically don’t want to purchase a property if they have to incur an assignment fee that is too high. By using Transactional Funding from Diversified Lending Solutions, you don’t have to disclose your contract details to the end buyer or worry about someone haggling over a high assignment fee.

First, “Person B” (the wholesaler) must have a motivated seller “Person A” and a prospective buyer “Person C”. Once those things are in place, “Person B” can either use cash to purchase the property from “Person A,” assign the purchase contract to “Person C” OR Persona B can use our transactional funding to handle the transaction without needing to do an assignment. 

With Transaction Funding from Diversified Lending Solutions, “Person A” will sell the property to “Person B” (A-B Closing) on the exact same day “Person B” will sell that same property to “Person C” (B-C Closing).

This double closing is made same by the Transactional Funding.

Our Transactional Funding process only requires 4 or 5 items:

1) A copy of your executed contract to purchase the property; this is called the “A to B Contract”.
2) A copy of your executed contract to sell that same property to someone else; this is called the “B to C Contract”.
3) Copy of your Drivers License
4) Corporate Docs (Articles of Org/Incorporation, EIN Document; Articles of Org)
5) If the person you are selling the property to (Person C or the End Buyer) is getting a loan to purchase the property, we will also need any information from the lender (commitment letter, term sheet, etc) to verify the scheduled closing date and confirm that all conditions to close have been met. 

There is a $1000 fee charged when the term sheet is executed, to cover the cost for legal counsel to review all documents and certify that the property and title meet all legal criteria needed for the closing. Additionally, there is an Origination Fee (1-2% percentage points of the loan amount) charged at closing. 

You are not required to make any down payment and there are no other closing costs related to the Transaction Funding. The Origination Fee can be rolled into the proceeds we fund for your Transactional Loan and subsequently paid off from the proceeds from your sale.

The net result is that you don’t have to show up to closing with any of your own money, and your fees are actually paid by Person C when the second closing is completed.