How it Works.

Transactional funding can be used for various types of real estate transactions, including double closings, simultaneous closings, assignments, and wholesale deals. While it is commonly associated with double closings, transactional funding can also be utilized in other scenarios where the investor needs short-term financing to facilitate a quick transaction.

Yes, borrowing earnest money deposit (EMD) money is a common practice in real estate transactions, particularly among real estate investors, wholesalers, and individuals involved in creative financing strategies. Borrowing EMD allows buyers to secure properties under contract without having to use their own funds upfront, which can be beneficial for those with limited liquidity or who are pursuing multiple deals simultaneously. It’s a way to leverage capital efficiently and participate in real estate transactions without tying up personal funds.

It’s rare to find specific lenders or institutions that specialize exclusively in lending earnest money deposit (EMD) money. Typically, the amounts involved in EMDs are relatively small, making them less attractive for most investor entities to focus on. Additionally, in many real estate transactions, an EMD is required to secure a contract before even engaging with investment bankers or other financial institutions for larger financing needs. Therefore, borrowers often rely on personal funds, private lenders, or general real estate financing options rather than specialized EMD lenders.