Simultaneous or Back-to-Back Closing?

Two Ways to Fund Wholesale Flips, REO or Short Sale

Here are two common ways that real estate investors use to finance house flip transactions without using any of their own cash or credit. These strategies are used by wholesalers who are flipping short sales, pre-foreclosure or REO properties.

  • Simultaneous Closing Using B-to-C Buyer’s Lender Funds
  • Back-to-Back Closing using Transactional Funding Loan

Side A to B to C Contract

Both these types of flip transactions have the same initial requirements, which are Side A to B, and B-to-C side contracts secured by the investor. When the contracts are executed, the investor places them both in escrow at a single title company or closing attorney. The difference between the two types is how the Side A to B transaction is funded.

Simultaneous Closing

In a simultaneous closing, the the end-buyers lender funds the B to C contract closing first. The side A to B side is waiting to close immediately afterward, and then the funds are disbursed to Seller and profits to the investor. The order of recordation of the title deed is orchestrated by the title company so there are no title defects. It is called simultaneous, but for all practical purposes, the investor has sold the property before he or she closes on the purchase. This procedure was widely accepted by title companies for many years, but is now rarely allowed.

Back to Back Closing Funds

A back-to-back closing is similar in process, but with one major difference. In a back-to-back closing, the investor funds Side A-to-B transaction, separately from the end-buyers financing or cash. He or she closes the purchase of the property before selling it to the end user and does not use the end buyer’s funds.

Title Company Closing Rules Change

Because of increased industry scrutiny and the many changes in title company internal regulations, investors are being forced to fund their side of the transaction using a back-to-back closing and transactional loan.  These types of loans are often called “Flash Cash” because they are paid back very quickly.

Also, there has a bit of change in the terminology. A simultaneous closing has historically been known as a seller financing technique, where the private mortgage note created by the seller is sold to a note buyer upon closing. The term simultaneous closing has been expanded in recent years to include flipping the deed to a property as well as the note.

In conclusion, a simultaneous closing means that the investor uses the buyer’s money to purchase the property and then resell the deed without funding his or her purchase. In a back-to-back closing, both sides are funded separately.

{ 42 comments… read them below or add one }

Derrick Stephens January 14, 2010 at 4:19 PM


i need 4.5m for transitional funding I am both “B” and “C” in the transaction. “B” will be a Trust and “C” will be my LLC. What info. will you need from me to facilitate this transaction. I am aware you will need both contracts and the one Title companies info. we will. Also do you have a DPA program. i will need pricing on both products. Thanks, Derrick

admin January 14, 2010 at 10:56 PM

Hi Derek – It was nice talking with you. Sounds like a great property and I look forward to hearing from you about final funding date. -Paul

jenn little child April 26, 2010 at 1:48 AM

we have a approved 180k offer in on a short sale and need 200k for rehab , we may possibly have the home sold for 240k to a fella in may can you help us with this ?also do you do other types of funding ??? would you ever consider a higher percentage loan for a home raffle by a non profit for say 6 mos and if not you do you know any one ?

admin April 27, 2010 at 9:34 PM

Thanks for your inquiry. Short Funding does not have a program fro rehab loans or raffle. If you decide to wholesale the deal to an investor (for, say $190K), then you would be eligible to use our transactional funding product.

Pasit April 27, 2010 at 10:46 PM

If A and B is accept the offer, how much time do i have to find c buyer?

James May 5, 2010 at 10:44 PM

What is the typical timeframe between the A-B & B-C closing in California?

admin May 6, 2010 at 2:18 PM

Hi James – In CA the typical timeframe is next day as many of the title companies require a “separate” day of closing. Sometimes 2 days.

candace May 28, 2010 at 1:03 AM

Can i provide proof of fund’s with my offers for a faster process?

admin June 2, 2010 at 9:17 PM

Yes, you can and should use a proof of funds with your offer(s). You can get a proof of funds at Order Proof of Funds for this purpose.

DENNIS RYAN June 9, 2010 at 10:18 PM

In looking at your site i have a question, do you do transactions for buyers who are buying
Packages of Distressed REO’s or only buyers looking to buy and re-sell one property at a time ?
The reason I ask is some of the forms that you need filled out, are looking for a single address.
We deal with a number of firms buying up bulk REO’s and then re-sell
for a a profit.and have been looking for firm to work with on Transactional Funding for clients

admin June 17, 2010 at 6:46 PM

Yes, we will fund bulk REO transactions. Prefer to start with a smaller project with new clients. Best to discuss rather than fill automated forms, please call 303-991-9884.

tom nguyen June 24, 2010 at 4:49 AM

so your company only has back-to-back funding, nothing longer than that? thanks.

admin June 25, 2010 at 1:53 PM

Yes, that is correct. We do work with repeat customers and Premier Members on different types of funding types.

Ahmad July 4, 2010 at 5:27 AM

I’m the person on the B to C side with my company on the c side, do you do transactional funding for this transaction?

admin July 6, 2010 at 12:27 AM

No, we cannot participate as this is considered loan fraud if you do not disclose the non arms length transaction to your C lender. Sorry.

David July 8, 2010 at 4:25 PM

Hello, I am the B and C, I have a 2 flat REO I”m negotiating to pruchase for $140K, which needs $40K of work, the ARV is $270K, would I be able to fund both the purchase and the rehab through your company?

Jerry Tyler July 8, 2010 at 5:30 PM

Do you have a wholesale broker dept.
If so please send info.

fierra edwards July 15, 2010 at 3:43 PM

If someone accepts my offer on a house will you fund the transaction, and how soon do I have to find a buyer for my property

Mark July 29, 2010 at 1:26 AM

Is it possible to do an (A – B) REO to Investor -self- and then do a refinance ( with cash out for re-hab) to self as owner occupy? Would be nice to not have to pass up a great deal for one’s self.

clive August 29, 2010 at 4:10 PM

what if i make a deal and dont find a buyer

admin September 8, 2010 at 10:22 PM

If you do not have a buyer, you should not apply for transactional funding. You may use a hard money loan to fund the purchase if you do you not have a buyer and the numbers work.

Broderick October 5, 2010 at 5:42 AM

I have all my ducks in a row including the end buyer ready to go.. Would i need a company DBA or LLC to get funding or will me as an individual work as well???

Adam October 18, 2010 at 5:43 AM

If anyone is looking to buy REO’s in So. Florida I work directly with the listing agent (former boss) shoot me an email. I work with CASH buyer’s only.


neurnanybep September 10, 2011 at 8:46 PM

Very nice to read such “old” posts!

This topic, like the little that you can see, they feel accompanied us at the beginning

Elise September 24, 2011 at 1:21 AM

Hello, i don’t see any new posts in 2011 but thought what the heck. I just put a house under Option in St. Louis, MO. I actually emailed this question probably a year ago, with no response so hopefully 2nd times a charm.
Do you fund A-B & B-C in St.Louis? how about IL?

admin September 27, 2011 at 9:45 AM

Hi Elise – I apologize for our lack of communication last year, but we greatly appreciate you coming back! We fund deals all over the nation and have done several in MO and IL. We look forward to doing business with you!

-Transactional Funding (Formally Short Funding, LLC)

Eathen October 8, 2011 at 2:02 PM

Do you fund in Michigan? More specifically, Detroit?

admin October 11, 2011 at 9:41 AM

Yes, we can fund any where in the country.

Charles December 28, 2011 at 10:43 AM

That Proof Of Funds Letter Doesnt work on Bank Owned Properties…Before You even get access to the MLS, the Broker is going to let you know that if you’re paying “All Cash” they need to see a RECENT BANK STATEMENT…That letter doesnt fly anymore…

David December 28, 2011 at 4:50 PM

I need a proof of funds letter to submit with the offer showing I’m an all cash buyers with the funds. Can you provide that?

Vanetta LPN December 28, 2011 at 11:27 PM

Hi, I feel very blessed to have found your site. A program that i thought did transactional funding, i sent a question to and was never answered, actually ignored. I appreciate the follow-up on your site to the multiple questions from all different sources. It shows integrity and commitment. I hope to have multiple deals funded through you guys very soon.

Shawn January 11, 2012 at 11:27 AM

I have a few deals lined up in Atlanta and just wanted to make sure you guys were still up and running since there were no recent posts, thanks in advance.

admin April 3, 2012 at 4:42 PM

Yes we are and we have done several in Atlanta in the last month!

admin April 3, 2012 at 4:44 PM

Thanks Vanetta! We look forward to working with you.

admin April 3, 2012 at 4:45 PM

Our loans are not considered “cash”. They are still loans but do not have the same stipulations as conventional loans.

admin April 3, 2012 at 4:46 PM

You are still getting a “loan” from us, however, do not require everything that a conventional loan requires.

Charles April 10, 2012 at 2:11 PM

Do you also have a title company that I could use, for both a-b and c-b transaction?

JasonA May 17, 2012 at 8:37 AM

Do you provide a bank statement for REO purchases?

admin May 29, 2012 at 4:23 PM

As a private money lender we do not provide bank statements. We are happy to verify funds over the phone for sellers and sellers agents.

admin May 29, 2012 at 4:25 PM

Charles – Please call our office, 303.339.8411.

We look forward to hearing from you!

Nicole January 8, 2013 at 2:58 AM

It was mentioned that you can verify with the seller and the seller’s agent, can you verify funds with the bank?

Planning to put an offer in for a REO property, will the banks accept a POF letter that just says we’re “pre-approved”?

admin January 8, 2013 at 11:36 AM

In this case, it sounds like the bank is your seller. So, yes we will provide verification of funding, given you are a registered member. It is rare that a bank will have an issue with the pre-approval, especially if it has been verified.

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