In the purchase of real estate, an investor can use a double closing to make a profit on a transaction between two other parties without taking title to the property. The investor needs to find a willing buyer and seller and a title company that will do a double closing. Here is how it typically works.
1
The investor enters into a contract (Contract A) to purchase a property (at a lower price).
2
Then the investor contracts with a buyer (Contract B) to purchase the property at a higher price than the in Contract A.
3
At this stage, the investor can assign the Contract A to the end buyer for a fee and be done. But in order to conceal the profit made from the seller, the investor may opt to go through with the double close.
4
At closing, the investor closes with the buyer first and completes a HUD-1 statement.
5
Then the investor closes with the seller and completes a separate HUD-1 statement.
6
The money from the first closing is used to cover the second closing and the difference is paid to the investor after all fees are paid.
7
The investor instructs the closing agent to deed the property from the original seller to the end buyer. The investor never takes title to the property.
In the purchase of real estate, an investor can use a double closing to make a profit on a transaction between two other parties without taking title to the property. The investor needs to find a willing buyer and seller and a title company that will do a double closing. Here is how it typically works.
1
The investor enters into a contract (Contract A) to purchase a property (at a lower price).
2
Then the investor contracts with a buyer (Contract B) to purchase the property at a higher price than the in Contract A.
3
At this stage, the investor can assign the Contract A to the end buyer for a fee and be done. But in order to conceal the profit made from the seller, the investor may opt to go through with the double close.
4
At closing, the investor closes with the buyer first and completes a HUD-1 statement.
5
Then the investor closes with the seller and completes a separate HUD-1 statement.
6
The money from the first closing is used to cover the second closing and the difference is paid to the investor after all fees are paid.
7
The investor instructs the closing agent to deed the property from the original seller to the end buyer. The investor never takes title to the property.