Double closing is an excellent way to earn quick money as a wholesaler in the real estate industry. But although the process is faster, there are many challenges for the wholesaler, including getting the best transactional funding and fostering a relationship with both the seller and the end buyer. If you’re a wholesale investor who is looking to double close a real estate deal, the following guide will help you do things the right way so you can earn more money quickly.
What Is Double Closing?
Double closing is a real estate strategy that involves an investor purchasing a property so they can quickly sell it to another buyer and make a considerable profit. This can typically be done in a couple weeks to a month. Neither the buyer nor the seller will know your markup.
This method involves two transactions, where the first one is between the original seller and the wholesaler, and the second one is between the wholesaler and the end buyer.
Get To Know The Local Laws
Double closing is not legal in every state, and the regulations for such a practice vary from state to state. Therefore, it’s critical that you’re well-informed about local laws in your state to avoid last-minute surprises.
Close In Escrow
Closing in escrow is a common occurrence in real estate transactions. The buyer and seller complete all legal responsibilities before the third-party (lender) releases the funds. As a wholesaler, you can use this option and earn more money if you double close the day funds are released.
You can close in escrow with the original seller in the morning and then close with the end buyer in escrow later in the day. When the funds are finally released from the end buyer, you can use them to pay the original seller. However, this is a risky transaction, and you’ll need to maintain relationships with both the original seller and the end buyer. Moreover, you’ll need to find a title company that is friendlier to wholesalers.
Find The Best Transaction Funding Company
Finding a transaction lender who’ll provide 100% funding with no upfront fees can be an uphill task. Look for a lender who won’t check your credit and doesn’t have an income requirement. And should the end buyer decide to back out of the sale, it’s good to have a transaction lender that doesn’t charge any fees if the deal does not close.
Non-Refundable Deposit
When the end buyer backs out of the sale, it’s likely you’ll face a tough situation if you have obtained transactional funding. In order to avoid this, you can ask the buyer to pay a non-refundable deposit ranging from $2,500 to $5,000. A deposit of this size is likely to ensure a closing later on. If you’re looking for quick transactional funding with no upfront fees, reach out to us for help. We work in all states except Alaska and Hawaii.