In the fast-paced world of real estate investing, double closing has become a popular strategy, especially for wholesalers. It’s a smart way to flip a property without holding onto it for long. But before you jump in, it’s important to understand how it works, when to use it, and where to find funding.
Here are the five essentials you should know about double closings in real estate.
1. What’s the Role of Wholesaling in Double Closing?
Double closing is closely tied to real estate wholesaling. Wholesalers find off-market properties at a discount and connect sellers with investors or buyers willing to pay more. Essentially, wholesalers act as the middle link between seller and buyer.
In a double closing (also called a back-to-back closing), the wholesaler first buys the property from the seller and then sells it immediately to the end buyer. It’s a great way to protect your profit margin while keeping both transactions separate and legal.
2. How Does a Double Closing Work?
Think of double closing as two deals happening on the same day:
Deal 1 (A-to-B): The seller (A) sells to the wholesaler (B).
Deal 2 (B-to-C): The wholesaler (B) sells to the final buyer (C).
Here’s how the process usually goes:
- You find a motivated seller ready to sell at a low price.
- You sign a contract with them and then find a buyer willing to pay more.
- You secure funding for the first deal (A-to-B).
- Both deals are closed on the same day or within a short time frame.
- You repay the funds using money from the second sale and keep the difference as profit.
3. How Do You Fund a Double Close?
Funding can be a challenge, especially if you don’t have cash in hand. But don’t worry — there are several options:
- Personal cash or private investors
- Traditional loans
- Transactional funding
- Single-source funding
Transactional lenders offer short-term loans (sometimes called “flash cash”) that help you buy the property without needing your own money. These are short-term bridge loans, usually paid back within a few days. Some transactional funding companies don’t require credit checks, making the process quicker and easier.
The cost is usually low if the deal closes quickly (typically 1%–2.5% of the loan). Just make sure your end buyer is ready with proof of funds, as this assures the lender the deal will close without delays.
4. Can You Use Double Closing for Any Property?
Yes — double closing can work for nearly any type of real estate, from houses to land to commercial properties. The only condition is that your title company, attorney, or escrow agent must be familiar with the process and willing to handle both transactions.
Also, make sure there are no restrictions from third-party lenders involved in the deal.
5. How Do You Find an Attorney for Double Closing?
Not every attorney or title company is familiar with double closings, so you’ll need to do some digging. The best way? Talk to local investors.
Search online for “we buy houses” in your area and contact those companies. Ask them who they use for closings. You’ll quickly notice a few names keep coming up — those are your go-to professionals.
Final Thoughts
Double closing is a powerful strategy for wholesalers and flippers who want to keep deals legal, separate, and profitable. With the right approach and proper funding, you can close deals fast and grow your business without much risk.
Looking for the best transactional funding to support your next wholesale deal? Companies like DoubleClose.com specialize in providing 100% funding with no upfront fees. Whether you’re working on small deals or need over $1 million in funding, they can help you close faster with less hassle. Reach out and see how easy it is to move forward with confidence.