Breaking Down The Double Closing Wholesale Strategy

Over the course of a contract assignment wholesale deal, the investor will sign a contract with the seller that gives them the right to buy the property. The contract legally gives the investor “equitable interest” in the subject home; they do not have a claim to the title. Therefore, when the contract assignment occurs, the investor is selling their rights within the terms already agreed upon with the original seller.

Unlike a double closing, contract assignment will never have an investor take title to the home, nor will they show up on the chain of title. Perhaps even more importantly, a contract assignment typically won’t require any funding on behalf of the investor. Instead, the new buyer will be paying the investor for the rights to buy the home.

Does A Buyer Need Cash In A Double Close Deal?

Cash is the single most impactful form of capital when conducting a double closing. If for nothing else, cash facilitates the speed necessary to make a double close possible. Sources of cash may include, but are not limited to:

  • Home Equity Lines of Credit (HELOCs)

  • Private Money

  • Hard Money

  • Self-Directed IRAs

When To Use A Double Close

The double close real estate wholesaling strategy is typically best relegated to a reserve role. That’s not to say double closing in real estate isn’t a viable option, but rather that it’s usually better to assign contracts when possible. That said, the best time to conduct a back-to-back closing is when selling a contract isn’t an option.

There are two primary reasons a double close should serve as an alternative to selling contracts: funding and fees. For starters, selling a contract can be completed in as little as a few hours, without needing any funding of your own. The final buyer is actually the one paying you for the opportunity to buy the home. Perhaps even more importantly, however, selling a contract isn’t saddled with the fees that have become synonymous with real estate transactions. As I already mentioned, a double close will require investors to pay all the fees and costs that typically accompany transactions in the real estate industry. Therefore, if you want to avoid paying additional fees, assigning a contract will be a better alternative.

Pros And Cons Of Double Closing

The ability to conduct a double close is invaluable to investors. However, not unlike any other strategy, a double close has both pros and cons that must be weighed against each other. Let’s take a look at some of the reasons investors may want to consider conducting a double close and some of the reasons they may not want to.

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Disclaimer: The information contained herein was pulled from third party sites. Although this information was found from sources believed to be reliable, FortuneBuilders Inc. makes no ...

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