What Wholesalers Need to Know About Transactional Funding

Transactional funding in Maryland usually comes up when you feel stuck between a great deal and a hard deadline. You might have a motivated seller ready to sign today, an end buyer who wants the deal tomorrow, and a contract that won’t allow an assignment—so the usual “wholesale assignment” playbook suddenly doesn’t work. In that moment, the pressure is real: you don’t want to lose the seller, you don’t want to lose the buyer, and you definitely don’t want to risk your reputation with a title company or lender by doing something sloppy. If that’s where you are, the goal isn’t to “get creative” in a reckless way—it’s to pick the cleanest structure that gets everyone to closing with the least friction and the most compliance.

Transactional funding in Maryland can be a legitimate tool for that exact situation. But it only helps when you understand what it is, how escrow restrictions work, what fees and timing look like, and what can blow up a double closing at the worst possible time. This guide breaks it down in plain language, with practical steps you can actually use.

What transactional funding is (and what it isn’t)

Transactional funding (sometimes called flash funding, same-day funds, or ABC funding) is short-term capital used to complete the first leg of a double closing. In practical terms, it’s money a third-party funder wires to the title company so you can purchase the property from the seller (A → B), hold title briefly, and then immediately sell it to your end buyer (B → C). The funding exists to bridge the gap for a few hours to a few days—usually because the end buyer’s funds aren’t available until the second closing.

Transactional funding is not a long-term rehab loan. It’s not designed for months of holding, renovation, tenant placement, or seasoning. It’s also not meant to cover repairs or construction draws. Think “closing tool,” not “project financing.”

Transactional funding is also not the same as hard money, even though some transactional funders look similar to hard money lenders. Hard money often involves underwriting you and the property, and it’s priced for weeks or months. Transactional funding is priced for speed and short duration—because the lender expects to get paid back immediately from the end buyer proceeds.

Transactional funding in Maryland is most useful when your spread is strong enough to cover the fee, your end buyer is real, and your title company is comfortable running back-to-back closings.

Image idea: A simple “A → B → C” diagram showing the flow of title and funds (use as a blog image with alt text: “Transactional funding double closing flow chart”).

Why wholesalers use it in Maryland

Transaction funding in Maryland usually becomes relevant for one reason: you can’t (or shouldn’t) assign the contract. Wholesalers love assignments because they’re efficient—one closing, one settlement statement, and you get paid an assignment fee. But assignments aren’t always available or appropriate.

No-assignment clauses are a common trigger. Some sellers, attorneys, agents, and institutional sellers include language that forbids assignment. Even when it’s allowed, some end buyers prefer a double closing for their own reasons.

End buyers sometimes demand privacy. Many experienced buyers don’t want sellers, agents, or competing investors seeing their purchase price or terms. If you’re assigning a contract, the seller can often infer your fee. With a double closing, the transactions are separated.

Some title companies or attorneys prefer clean structures. In certain circumstances, a double closing can be easier to document and explain than a messy assignment with addenda, disclosure questions, and seller pushback.

Transactional funding can also help you close “cash” on paper. When a seller wants proof of funds and a fast close, a transactional funder can make that possible—if your end buyer is ready to close immediately after.

Key reality check: Transactional funding doesn’t fix a weak deal. If your numbers don’t work, or your end buyer isn’t fully committed, transactional funding can amplify the damage rather than save the day.

How an A–B–C (double closing) really works

A–B–C closings are easier when you think of them as two separate sales that happen back-to-back.

Step 1: A (seller) sells to B (you)

The first closing is where you—party B—buy the property from the seller. Your transactional funder wires funds to the title company for this specific closing. The title company uses those funds to pay the seller, pay off liens that must be cleared, and record the deed into your name (or your entity’s name).

Important detail: Many transactional funders require that their money is used only for the purchase and settlement costs related to A → B. They don’t want their funds used for unrelated purposes.

Step 2: B (you) sells to C (end buyer)

The second closing is where you sell to your end buyer. The end buyer brings their funds—cash, private money, hard money, DSCR, whatever—and the title company uses those proceeds to pay off your transactional funding, cover settlement costs, and then cut you a check for the difference (your spread).

Step 3: Your “spread” is created at the closing table

Your profit is typically the difference between:

What you paid the seller in A → B
What your end buyer pays you in B → C
Minus closing costs and transactional funding fees

A clean double closing usually means both closings are scheduled same day, sometimes within a few hours, with the same settlement agent.

Image idea: A timeline graphic labeled “Morning: A→B closes” and “Afternoon: B→C closes” (alt text: “Same-day double closing timeline”).

Typical timelines and what can delay you

Transactional funding timelines are short by design, but don’t confuse “short duration” with “no moving parts.” If you plan on one-day closings and your title work isn’t ready, you’re setting yourself up for extension fees, angry sellers, and stressed buyers.

Common timeline ranges

Same-day funding is possible in many situations, especially when:

Title is clean
The end buyer has wired funds early
The title company is experienced with double closings

One to five days is also common when:

Title issues need a quick cure
Payoffs need verification
Parties are coordinating travel, signatures, or remote closings

The most common causes of delay

Title surprises are the top culprit. If there’s a lien, judgment, unreleased deed of trust, probate issue, or boundary/parcel confusion, your “one-day close” can become a scramble.

End-buyer funding delays are another classic problem. If your end buyer is using hard money, a private lender, or a transactional funder of their own, the wire may not arrive on time.

Documentation issues can also stall you. Missing entity docs, incorrect vesting, or incomplete contracts can pause the process.

Practical takeaway: If you need transactional funding, assume you need a title company that moves fast and communicates clearly—and you need your end buyer to wire early.

Transactional funding costs and fee ranges

Transactional funding fees are the price you pay for speed. Because the capital is typically used for hours or days, the pricing is usually expressed as a flat fee or a percentage of the funded amount.

What wholesalers commonly see

Flat fees often show up for smaller transactions, where funders charge a minimum amount regardless of deal size.

Percentage fees often apply when the funded amount is larger. Many wholesalers hear ranges like 2% to 12%, but your real number depends on risk, speed, deal size, and the lender’s model.

What makes fees go up

Riskier deals cost more. If your end buyer’s proof of funds looks shaky, if there are title complications, or if your spread is tight, lenders may price higher—or simply say no.

Time extensions can add more cost. If you miss the expected close window, some lenders charge extension fees or daily fees.

Low spreads can make fees feel painful. If your wholesale spread is small, transactional funding can eat your profit.

What makes fees go down

Repeat borrowers often get better pricing. If you close multiple deals cleanly with the same funder, your cost of capital may improve.

Strong end buyers help too. If the end buyer is established, has consistent funding, and wires reliably, your funding request looks safer.

Pro tip: Before you commit to a double closing, do a quick “fee stress test.” If your fee doubled and your closing costs came in higher than expected, is the deal still worth doing?

What lenders require to fund your deal

Transactional funding lenders typically care about one thing: the certainty of the second closing. They want to fund A → B only when B → C is essentially a lock.

Documents you should expect

A–B purchase contract signed and clean. The lender wants to see the terms, the price, and the parties.

B–C contract with your end buyer. This is often required because it demonstrates the “takeout” buyer.

End buyer proof of funds or lender commitment. Some funders want bank statements, hard money term sheets, or wiring instructions.

Settlement statement drafts for both closings. Experienced funders want to confirm the money flow makes sense.

Title company contact information and confirmation that the settlement agent is comfortable with the structure.

The underwriting mindset

Transactional underwriting is often “deal underwriting,” not “borrower underwriting.” Many transactional funders don’t care about your credit score because they aren’t betting on you for months. They’re betting that the end buyer’s funds will come in and repay them immediately.

But don’t assume it’s frictionless. Professional funders still verify documents, confirm the title company, and want confidence that no one is improvising at the last second.

Escrow rules: why funds can’t “leave the table”

Escrow restrictions are a core concept in transactional funding. You’ll often hear: “The funds cannot leave escrow.” That phrase means the lender’s money is meant to move within the controlled closing environment—wired to the settlement agent, applied to the purchase, and repaid from the second closing proceeds.

Why this matters: Transactional funding works because the funder’s risk window is tiny and the money is controlled. If funds are disbursed outside the settlement process, the lender’s risk changes, and many transactional funders simply won’t allow it.

Your job as a wholesaler is to plan around that reality. Don’t count on using transactional funding to cover unrelated costs, repairs, earnest money refunds, or “side agreements.” If you need working capital for business operations, that’s a different product.

Use this as a safety filter: If a lender says they’ll wire funds to you personally instead of to the title company, treat it as a red flag. A clean transactional funding setup generally routes the money through the settlement agent.

Privacy, disclosure, and avoiding drama

Privacy is one of the most practical reasons wholesalers choose a double close. If you’re assigning, sellers can sometimes see your fee or infer it. That can trigger emotional reactions—especially when the seller is distressed, under time pressure, or feeling like they “left money on the table.”

A double closing can reduce that friction because the A → B and B → C transactions are separate. Your seller sees your purchase. Your buyer sees their purchase. Neither automatically sees the other side.

But privacy is not a license to mislead. Good deals still require ethical communication. If the seller asks directly whether you’re reselling, don’t make your life harder with vague answers. The cleanest path is usually transparency about the structure without broadcasting numbers that don’t benefit anyone.

The emotional landmine: If your seller discovers your spread late—through a neighbor, a public record search, or an offhand comment—your reputation can take a hit even if you did nothing illegal. A calm, professional approach reduces the chance of that drama.

A professional standard: Keep your paperwork clean, your timelines realistic, and your communication consistent. That’s how you avoid the deals that “should have closed” but didn’t.

Risk checklist: what can blow up your double close

Transactional funding risk isn’t theoretical. Double closings fail for predictable reasons—so the smartest move is to treat your closing like a checklist, not a hope-and-pray moment.

1) End-buyer flake risk

End-buyer reliability is the biggest variable. If your end buyer backs out, you may end up owning the property. That might be fine if you have reserves and a backup plan—but it can be catastrophic if you don’t.

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Mitigation: Vet your buyer. Require nonrefundable earnest money when appropriate. Confirm wiring cutoffs. Have a backup buyer list.

2) Title and lien surprises

Title issues can stop closings cold. Even “small” items like payoff statement delays or HOA balances can push you past your funding window.

Mitigation: Open title early. Ask the title company for realistic timelines. Don’t schedule a same-day double close until the title company says they can deliver.

3) Settlement agent inexperience

Not every closing office likes double closings. Some settlement agents dislike the coordination, the perceived compliance risk, or the time pressure.

Mitigation: Use a title company that has done A–B–C transactions before. If they hesitate, find out why before you commit.

4) Tight spreads

Tight spreads make everything fragile. One extension fee, one payoff correction, or one extra settlement line item can wipe out your profit.

Mitigation: Build margin. If you can’t, consider assignment (if allowed) or renegotiate.

5) Repair surprises between closings

Condition changes can happen fast—especially with vacant properties. If the end buyer walks the property right before closing and finds new damage, the second closing may get delayed.

Mitigation: Control access. Re-check the property. Keep utilities on when needed. Communicate.

6) Compliance and disclosure mistakes

Contract mistakes and missing disclosures can create legal headaches.

Mitigation: Use strong contracts and review them carefully. If you want a deeper look at contracting basics, read Maryland real estate contracts for a practical overview.

Maryland-specific considerations (contracts, compliance, title)

Transactional funding in Maryland is shaped by how closings are handled and how local professionals view wholesaling and double closings. Maryland is not the same as a state where closings are handled entirely by attorneys with a different standard workflow.

Contracts must match the plan

Your A–B contract should clearly reflect the terms you can actually perform. If you promise a closing date that requires a double close, your timeline must be realistic.

Your B–C contract should be equally clean. If your end buyer has contingencies that allow them to walk easily, your transactional funding setup becomes fragile.

Title and escrow expectations matter

Maryland settlement practices often involve clear escrow handling and careful disbursement. Because of that, the “funds stay in escrow” concept isn’t optional—it’s central to keeping everyone comfortable and compliant.

If you want a seller-friendly explanation of escrow and what happens from contract to closing, share this escrow process guide with anyone who feels nervous about the mechanics.

Reputation is currency in local markets

Maryland investing communities are small worlds. The title companies, buyers, agents, and attorneys talk. One messy deal can make the next ten harder.

That’s why the best wholesalers treat transactional funding like a professional tool: used carefully, documented clearly, and only when it truly fits.

Alternatives to transactional funding

Transactional funding isn’t always the best choice—even when you’re facing a no-assignment contract. Here are realistic alternatives wholesalers use, and when they make sense.

Assignment (when allowed)

Assignments are still the simplest structure when permitted. You avoid two sets of closing costs and the transactional funding fee.

When it works: Seller allows assignment, buyer doesn’t mind, and your title company is comfortable.

Novation agreement

Novation can allow you to market a property to an end buyer while the seller remains in control of certain aspects until closing (rules vary and the structure must be handled carefully).

When it works: You need transparency and collaboration with the seller, or your buyer requires a clean path without you taking title.

Hard money bridge

Hard money can act as a short bridge in some cases, especially if you may need a slightly longer window than transactional funding allows.

When it works: The spread supports the cost, the deal might need a short cure period, or you may pivot to a wholetail if the end buyer delays.

Private money relationship

Private lenders sometimes provide short-term funds for closings when they trust the operator.

When it works: You have repeat business, strong documentation, and reliable takeout buyers.

Partnering with a direct buyer

Direct buyers can eliminate the problem entirely by buying the property directly, especially when sellers need speed, certainty, or an as-is sale.

If you’re working a deal where the seller may prefer a simple cash exit (and you want to avoid the risk of an end-buyer flake), it can help to share what it’s like to sell to a local investor so everyone understands the option.

How Simple Homebuyers can help wholesalers and investors

Simple Homebuyers can help Maryland wholesalers in two ways: by strengthening your deal selection and by simplifying your exits.

Deal selection support matters because the fastest funding in the world won’t save a deal that’s not actually a deal. The professional investors at Simple Homebuyers can help you spot red flags early—title risks, repair realities, neighborhood value traps, and buyer-demand issues that reduce liquidity.

Exit flexibility matters because wholesalers don’t lose money only when they buy wrong—they lose money when they can’t exit cleanly. When your end buyer gets cold feet, when a lender delays a wire, or when a double closing becomes more expensive than expected, having a credible local buyer in your network can be the difference between profit and disaster.

Local collaboration is where the advantage shows up. The direct buyers at Simple Homebuyers live and work in Maryland. That means we understand how local closings flow, what local buyers expect, and how to keep the process calm instead of chaotic. If you want a no-obligation conversation about a deal you’re structuring—assignment, double close, or direct purchase—reach out.

Call to action: Want to walk through a transactional funding deal structure, verify your spread, or explore a simpler direct-sale option? Call Simple Homebuyers at (240) 776-2887.

FAQs

Is transactional funding legal in Maryland?

Transactional funding can be legal when structured properly, documented clearly, and handled through a legitimate settlement process. The key is using clean contracts, complying with closing requirements, and avoiding misleading representations.

Do I need good credit to get transactional funding?

Often, credit isn’t the focus because the lender expects repayment immediately from the B → C closing. But lenders may still verify your documents, your title company, and the certainty of your takeout buyer.

Can I use transactional funding if my end buyer uses a loan?

Sometimes. It depends on how quickly the end buyer’s lender can fund and whether they require seasoning, appraisals, or additional documentation. If the end buyer’s funding isn’t immediate, transactional funding becomes riskier.

Do I pay two sets of closing costs in a double closing?

You can. In many double closings, you’ll pay settlement costs on both transactions. That’s why your spread must be strong enough to justify the structure.

What’s the biggest mistake wholesalers make with transactional funding?

The biggest mistake is assuming the end buyer is guaranteed. If your end buyer delays or walks, you may be stuck owning the property—or paying fees you didn’t plan for.

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