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  • Writer's pictureDan Caradonna

The 5 Essential Questions to Ask Before Entering Into a Transactional Funding Agreement

Transactional funding has emerged as a vital resource for real estate investors, enabling quick, short-term financing for same-day property flips. This financing method, while powerful, requires careful consideration to ensure it aligns with your investment strategy and goals. Before you enter into a transactional funding agreement, it's crucial to arm yourself with information. Here are the five essential questions you should ask to navigate your next deal with confidence.

1. What Are the Exact Costs Involved?

The first and perhaps most obvious question revolves around the costs associated with the funding. Understanding the fee structure is critical to determining the profitability of your deal. Ask about any and all fees, including interest rates, origination fees, processing fees, and if there are any hidden costs that could surprise you later. Transparency in these details will help you accurately calculate your potential return on investment.

2. How Fast Can the Funds Be Made Available?

The essence of transactional funding lies in its ability to facilitate quick deals. Timing is everything. Therefore, you need to know how swiftly the funder can make the capital available. Ask about their standard funding timeline and if they have any procedures in place to expedite the process when necessary. This information will help you plan your transactions and communicate effectively with buyers and sellers.

3. What Documentation Will I Need to Provide?

Preparation is key to a smooth transactional funding process. Inquire about the specific documentation and information the lender requires for approval. Common requirements include the contract between you and the seller, proof of a subsequent buyer, and an estimated HUD-1 statement for the closing. Knowing what’s expected upfront can save you valuable time and prevent delays in securing the funding.

4. Are There Any Restrictions on Property Types or Locations?

Not all transactional funders operate within the same parameters. Some may have restrictions on the types of properties they fund or limit their services to certain geographical areas. It's important to clarify these details early on to ensure the property you're investing in is eligible for funding. Understanding any limitations can also help you tailor your investment strategy to fit within the scope of services offered by the funder.

5. What Happens If the Deal Falls Through?

Despite best efforts, not every real estate deal closes as planned. It’s essential to discuss the funder's policies regarding deal cancellations or extensions. Ask about any fees or penalties associated with failed closings and if there are options for extending the funding period should unexpected delays arise. Knowing the contingency plans will help you manage risks and make informed decisions.


Entering into a transactional funding agreement is a strategic move that can significantly impact the success of your real estate investments. By asking these five critical questions, you equip yourself with the knowledge needed to choose a funding partner that best suits your project's needs. Transparency, speed, preparation, understanding of restrictions, and knowing the fallback plan are key factors that will guide you in selecting a reliable transactional funder.

At Elite 360 RES, we pride ourselves on providing clear, straightforward answers to these questions and any others you may have. Our goal is to support your investment success with flexible, fast, and fair transactional funding solutions. Contact us today to learn how we can facilitate your next real estate venture.



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