In the competitive world of real estate investing, timing and structure can make or break a deal. If you’re wholesaling properties and want to keep your profit margins secure while staying compliant, a double close might be your golden ticket. Let’s explore how this strategy works, why it matters, and how you can use it to protect your bottom line.
What Is a Double Close in Real Estate?
A double close, also known as a back-to-back closing, involves two separate transactions:
- Transaction 1: You (Investor B) buy a property from the original seller (Seller A).
- Transaction 2: You (now Seller B) immediately sell the same property to the end buyer (Buyer C) at a higher price.
The key is that both deals happen within a very short time, sometimes on the same day. The difference between your buy price and sell price becomes your profit. Double closing is popular in wholesale real estate because it allows you to keep your fee hidden from the seller and the buyer. It also provides more legal clarity in markets where assignment contracts are restricted.
When Should You Use a Double Close?
A double close makes sense in several common real estate scenarios:
- When Profits Are High: If you’re making $20,000 or more on a wholesale deal, a double close protects your profit by not disclosing it to either party.
- In Regulated Markets: States like Illinois and Oklahoma now regulate wholesaling. Double closing ensures compliance by transferring legal ownership even if briefly.
- To Avoid Wholesaler Scrutiny: Some buyers and sellers are wary of assignment fees. A double close sidesteps that altogether.
What Is Transactional Funding and Why Do You Need It?
Transactional funding is a short-term loan used to finance the first leg of the double close. It’s typically repaid within 24 to 48 hours after the second closing. (Also read: Pros and Cons of Transactional funding)
You can secure this through a transactional lender, who usually requires:
- A signed B-to-C contract showing an end buyer.
- A title company that understands double closing.
- Proof that funds will be returned quickly.
This funding lets you complete both closings without using your cash and is especially useful for investors who make multiple deals each month.
How Do You Find a Transactional Lender?
You can find transactional lenders through:
- Investor networking groups
- Title companies familiar with investor closings
- Online platforms like DoubleClose.com
Look for lenders with flat fees, quick turnaround, and no credit checks. Always ask whether they provide proof of funds for real estate, as many deals require it upfront.
Step-by-Step: How to Execute a Double Close
- Locate a Distressed Property: Look for off-market deals from motivated sellers.
- Negotiate and Lock in Your Purchase Price: Sign a purchase agreement with the original seller.
- Find an End Buyer: Market the deal to other investors or cash buyers at a higher price.
- Set Up Your Closings: Schedule back-to-back closings at the same title company.
- Secure Transactional Funding:Collaborate with a lender to secure temporary financing for the first deal.
- Double Close and Get Paid: Complete both deals. You never hold the property long-term, and your profit is in the spread.
Benefits of Double Closing
- Confidential Profits: Sellers don’t see your markup.
- Legal Protection: You take title, reducing risk in regulated states.
- More Deal Control: You’re not relying on the end buyer to accept an assignment.
Pitfalls to Watch Out For
- Higher Closing Costs: You have two title policies and transfer taxes.
- Tight Coordination: If one deal falls through, you’re stuck.
- Lender Guidelines: FHA and VA buyers may require “seasoning” of the title.
Real-World Stats: Why This Strategy Works
According to ATTOM’s 2025 data, over 35,000 homes entered foreclosure in March alone, providing a massive opportunity for savvy investors. Meanwhile, a recent survey from BiggerPockets found that a significant number of wholesalers are using double closing to stay compliant with local laws and protect their profit margins.
Is Double Closing Legal?
Yes, in most states. But make sure:
- You disclose both closings to your lender and title company.
- You don’t mislead any parties about pricing or profit.
- You work with an attorney to review your paperwork.
Final Thoughts
A double close isn’t just a backup plan. It’s a smart, strategic move for investors who want to scale fast and keep more of what they earn. Whether you’re dealing with tight regulations or just want more control over your deals, double closing backed by transactional funding can be a powerful path forward.
If you’re looking for a partner who understands these complex transactions, DoubleClose.com can help you get the financing you need to make your next deal.