I have been looking up and researching transactional funding and it looks like something I would be interested in pursuing for some of my deals. I have a couple of questions though. First, who has used transactional funding on this site? Can you share your experience please? What are the risks if any? If the deal falls through do these companies require any fees? And if so are there any ways to make sure that I as the "B" buyer don't have to incur the fees if I was not the cause for killing the deal?
I have not personally used transactional funding, but work for a transactional funding lender. For our deals, there is minimal risk to the investor because the deal must be pre-contracted on both sides before we will lend. Should the back end buyer fall out, the loan will go into default and there will be a default rate. I haven't heard of any companies that will let you get out of the deal without any fees or a default rate should the deal go south, Hope that helps.
Eli is right, for 1-day transactional funding the risk to the B investor is minimal. Depending on the title company, it is likely that if the B-C falls apart and does not close same day then the A-B transaction will not actually be completed. The final disbursement of funds will be cancelled and the whole thing will then be negated.
No fees would be owed if the deal falls apart.
For a 30 day Transactional Deal (which I call a Seasoning Loan) it would be somewhat different and depending on the lender there might be some risk to the B investor.
There are a few good transactional lenders on BP. Like me!! Compare costs.