Understanding 6 Month Transactional Funding

Transactional funding is a short-term or bridge loan that is used to finance real estate transactions. It is typically used by investors who wish to purchase properties and then quickly resell them for a profit. One of the most popular types of transactional funding is 6-month transactional funding. In this article, we will take an in-depth look at what 6 month transactional funding is and how it works.

Understanding 6 Month Transactional Funding

What is 6 Month Transactional Funding?

As mentioned earlier, 6 month transactional funding is a type of short-term loan that is specifically designed for real estate investors. The loan covers the entire purchase price of the property plus any associated closing costs or fees. It allows investors to purchase properties quickly and without having to put up their own capital.

The term "6 months" refers to the length of time that the loan lasts. This means that investors have six months to acquire and sell the property before they are required to repay the loan.

How Does 6 Month Transactional Funding Work?

To obtain 6 month transactional funding, investors must find a reputable lender who offers this type of financing. They will then complete an application process, which typically includes providing information on the property they wish to purchase, as well as their credit history and financial standing.

Once approved for the loan, investors can use it to purchase the property they are interested in. The lender will usually require some form of collateral to secure the loan, such as a mortgage on the property or other assets held by the investor.

Investors can then use the six-month period provided by the loan to make renovations or improvements on the property before reselling it for a profit. Once sold, they must repay both the principal amount borrowed as well as any associated fees and interest charges incurred during this time frame.

Benefits of 6 Month Transactional Funding

The primary benefit of 6 month transactional funding is that it allows real estate investors to quickly purchase and sell properties without having to use their own capital. This means that they can take on multiple projects simultaneously, maximizing their potential profits.

Another benefit is the short-term nature of the loan. Because the loan only lasts for six months, investors can quickly flip properties and move onto new projects without being tied down to long-term debt obligations.

Drawbacks of 6 Month Transactional Funding

One of the main drawbacks of 6 month transactional funding is that it can be expensive. Lenders typically charge higher interest rates and fees for these types of loans due to the short-term nature and inherent risks associated with them.

Additionally, investors must ensure that they are able to sell the property before the six-month period expires. If they are unable to do so, they may be required to repay the loan using their own funds or risk losing their collateral.

Finally, some lenders may require a certain level of experience or expertise in order to qualify for 6 month transactional funding. This could limit access for newer investors or those with less financial stability.


In summary, 6 month transactional funding is a short-term loan designed specifically for real estate investors. It provides quick access to capital which can be used to purchase investment properties, make improvements, and then resell them for a profit within a six-month period.

While there are benefits to this type of financing, including quick access to capital and lower long-term debt obligations, there are also drawbacks such as higher fees and interest rates as well as potential risks if the property cannot be sold within the allotted time frame.

Overall, 6 month transactional funding can provide valuable support for real estate investors who have established expertise in flipping properties and an understanding of their local market conditions. As with any financial product, it’s important for investors considering this option to carefully weigh the costs and benefits and consult with professionals in order to make informed decisions.


What is 6 month transactional funding?

6 month transactional funding is a short-term loan used in real estate investing to bridge the gap between purchasing and selling a property. This type of financing is typically used by house flippers who need the funds to make repairs and renovations before selling the property for a profit.

How does 6 month transactional funding work?

In a nutshell, an investor borrows money from a lender to purchase and renovate a property. The lender provides the funds for up to 6 months, after which point the investor must repay the loan in full along with any interest that has accrued. The goal is to sell the property before the term of the loan ends, thus avoiding any long-term debt obligations.

What are the benefits of using 6 month transactional funding?

One major benefit of using this type of financing is that it allows investors to quickly acquire and fix up properties without having to put up their own capital. It also provides greater flexibility than traditional bank loans since there are typically no credit checks or extensive underwriting requirements. Additionally, because these loans are short-term, investors can focus on finding profitable deals rather than worrying about long-term payments.

What are some potential drawbacks of 6 month transactional funding?

One potential downside is that these loans can be expensive due to high interest rates and fees. There’s also a risk involved if investors aren’t able to sell the property within the allotted timeframe – they could end up defaulting on the loan or having to refinance at higher rates. Additionally, some lenders may require personal guarantees or collateral, which can be risky for borrowers who don’t have significant assets.

Who is eligible for 6 month transactional funding?

Generally speaking, anyone who has a good deal on a fix-and-flip property can be eligible for this type of financing. However, lenders will typically require a solid business plan, a track record of successful flips, and some level of financial stability. Some lenders may also require borrowers to have a certain credit score or minimum income level.

Is it easy to get approved for 6 month transactional funding?

It depends on the lender and the borrower’s qualifications. While these loans are generally easier to get than traditional bank loans, there’s no guarantee that everyone will qualify. Borrowers should be prepared to provide documentation of their income, assets, and experience in real estate investing. They should also be ready to demonstrate how they plan to make a profit on the property they’re looking to flip.

How much can you borrow with 6 month transactional funding?

The amount you can borrow depends on several factors, including the value of the property being purchased and the amount needed for renovations. Typically, lenders will lend up to around 70-80% of the purchase price plus renovation costs. So if a property is being purchased for $100,000 and needs $50,000 in repairs, a borrower could potentially borrow up to $120,000 from a lender.

What happens if I don’t sell my property within 6 months using this funding?

If you don’t sell your property within 6 months using this type of financing, you’ll need to come up with another way to pay off your loan balance. This could mean refinancing at higher rates or finding other sources of funding such as personal loans or lines of credit. Alternatively, some lenders may offer extensions on their loan terms for an additional fee or interest rate increase. It’s important to have a backup plan in case things don’t go according to plan!

Can I use 6 month transactional funding for rental properties?

In general, no. This type of financing is specifically designed for fix-and-flip properties that are being bought with the intention of reselling within a short timeframe. For rental properties, investors may need to seek out different types of financing such as traditional mortgages or commercial loans.

How do I find a reputable lender for 6 month transactional funding?

It’s important to do your research and shop around when looking for lenders who offer this type of financing. Look for lenders who have experience in real estate investing and a track record of successful transactions. Check their reviews and ratings online, and don’t be afraid to ask questions about their fees, interest rates, and loan terms. It’s also important to read the fine print carefully and make sure you understand all of the terms and conditions before signing on the dotted line!

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