Offline1. 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.
Read more: How to Conduct a Double Closing | eHow.com http://www.ehow.com/how_5803674_conduct-double-closing.html#ixzz1NMmaDm8...
André
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Andre,
Thanks for taking the time to share this. It helps because we plan on wholesaling.
Cheryl & Dave
This is a great explanation of the process. I think it will help out anyone who is getting confused with the steps.
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How is the money form the first closing used to pay for the second closing?
When you do a double closing, does the investor have to pay the closing agent twice?
Thanks for all the advice,
Learning and progressing every day,
Valerie
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In a double close the money the investor is paying to buy the property is covering the closing costs from the first close. You are responsible for covering the closing cost for the first close and the end buyer will cover the closing cost for the second close.
When you do a double closing, does the investor have to pay the closing agent twice?
Thanks for all the advice,
Learning and progressing every day,
Valerie
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125
It is my understanding that a double closing, as described above very well BTW, is now becoming harder to do. The reason is fewer title companies and attorneys are willing to do them. However you may get them to do two truly separate closings in the same day (Back To Back it's sometimes called). To do this you of course need to borrow the funds via say a transactional funding lender to purchase the property (and borrow enough to cover your closing costs). Then when you close on the B to C transaction the C buyers funds will pay off your lender and provide your profit. Of course you also have the benefit of concealing your profit from the end buyer, if that's a concern, just like with the double close.
Just my 2 cents, hope it helps someone.
Steve
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