HOW DOES IT WORK?
How does a Real Estate Double Closing work?
A double closing is organized and coordinated by the real estate investor/wholesaler. This
investor essentially acts as a middleman.
Think of the two deals as:
The second transaction (B→C): The wholesaler/investor is “B” and the end buyer is “C”.
The first transaction (A→B): The Seller is “A” and the wholesaler/investor is “B".
As the investor (“B”), you will purchase a subject property at a discount from a Seller and then
immediately sell that property to a new end buyer, “C”.
The funding can be set up in a way where the cash proceeds from the investor’s sale to the
end buyer (B→C) can fund the purchase from the original seller (A→B) through escrow.
When the title company receives the end buyer funds and closes out the A→B transaction, the
investor can then immediately close out the sale of B→C.
When B→C closes, the excess proceeds are what the investor makes on the deal!
Because these two transactions are happening at the same time, the term “double closing”
was coined.
Every state will have its own requirements and rules around conducting a double closing. That
being said, double closing is legal in many U.S. states. Investors should always work with
a local reputable real estate attorney to stay up to date on the latest rules and regulations.
How is a Double Closing Funded?
Funding a double close can happen in one of two ways.
The first way is if the end buyer is bringing funds to purchase the subject property (B→C) and
the wholesaler/investor uses those funds to fund the first closing at the same time (A→B).
Many states no longer allow this practice, so wholesalers/investors can either utilize their own
capital or find transactional funding.
Transactional funding is when a lender will loan up to the full amount of the deal to the
investor/wholesaler to complete the A→B purchase. This allows the investor to close without
leveraging his/her own money.
The transactional funding lender will typically charge a percentage of the loan as well as an
origination fee.
Transactional funding lenders, unlike hard money lenders, will typically require a quick
turnaround time to get paid back. Therefore, a double close must take place quickly, typically
within hours or 1-2 business days, for this funding source to work.
Double Closing by State
Double closing, a legal real estate strategy, varies significantly across states, each with its own regulations and requirements. In California, double closings must span at least two days to comply with title policy procurement rules, with each transaction funded independently. Florida also permits double closings but requires investors to use their own capital for the A to B purchase, prohibiting the use of end buyer funds. Similarly, Texas mandates separate funding for each leg of the transaction.
Other major states have their own unique guidelines. In New York, double closings are legal but often require full disclosure to all parties and adherence to strict timing protocols. Illinois allows double closings but may require specific documentation and transparency, particularly concerning the funding source. In Georgia, while legal, double closings are closely scrutinized, and lenders often have additional conditions to prevent fraud. Each state’s distinct legal framework underscores the importance of understanding local laws and working with knowledgeable professionals to ensure compliance.
Have A Deal? Let’s Get Started.
Do you already have a deal and need funding now? Click the link below, fill out
the application, and let's work together to get you funded.
Frequently Asked Question
When is transactional funding used?
Transactional funding is used when a buyer of a property has a contract that is not assignable. The wholesale buyer wants to maximize his wholesale markup profit by not assigning his contract to a second buyer. With transactional funding, you do not have to disclose contract details to the end buyer.
How quickly can I borrow funds?
We can fund immediately and close within 1 day. Please fill out our deal form and submit all of the information requested. From there we will contact you and begin the closing process.
What is a Proof of Funds letter and why do I need it?
A Proof of Funds letter is an official document that verifies you have the financial resources required to complete a real estate transaction. It’s often requested by sellers or lenders to confirm that funds are readily available before finalizing a purchase. This letter provides assurance and credibility during your real estate dealings, ensuring smooth and timely transactions.Request your Proof of Funds letter here.
Is my credit score a factor when utilizing transactional funds?
No. There are no personal financial requirements or credit scores needed to utilize and obtain transactional funding. We do not require personal information. We do require the A->B and B->C contracts as well as title company information.
What states do you work in?
We work in all 50 US states.
Do you require that the buyer be a person or an entity such as an LLC?
There are no requirements of the naming of the buyer.
Do you require an earnest money deposit (EMD)?
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Are their any fees that I will have to pay?
There are minimal fees that we charge to run due diligence reports which range between $100 and $150 per transaction.
What are your fees?
Up to $1m: 1% (minimum $1,500). Above $1m: Inquire
About
Real Estate Double Close
Real Estate Double Close has a simple philosophy, we help our clients get to the closing table.
Our Principal Member, Joshua D. Rand, Esq. has been practicing real estate law in Georgia for over 20 years. During that time, he has been involved in thousands of real estate closings and has expert knowledge of title, purchase and sale contracts, and real estate finance.
About Invest Fund Groups
Invest Fund Groups gets real estate investors we help our clients get to the closing table. We've helped thousands of real estate investors and wholesalers with their double closings making. We consider ourselves parters in their deals. If you win, we win.
Need Proof of Funds?
Ensure your real estate transaction proceeds smoothly. Complete the form to request an official Proof of Funds letter today.