BiggerPockets

Lets reword that contingency to keep the meaning, but make it a little more apparent what's happening: "This offer only valid if I can find someone who will pay me 5% more than I'm paying you. Sorry, I know you're taking it in the shorts on this sale, but I will only buy if I can make my cut."

What do you think. Will the bank accept that?

If you're going to make an offer on a short sale you better be able to close. I'm not concerned about the bank, they will look out for their interests. But you get a homeowner on the hook in a deal like this, and you need to close. If you can't find a buyer, find the money and buy it yourself.

WOW, that offer would end up in the circular file. A very experiences agent I know (1000+ shorts in 30+ years) writes a preliminary offer for every listing. She checks the comps and submits an offer from Joe Buyer at a realistic value to get the process rolling. The bank then approves the sale, orders the appraisal, and counters the offer. She then lists it in the MLS for the banks APPROVED counter offer price. After she finds a new willing and able buyer she resubmits the new offer (same terms) and informs the bank that the old buyer has moved on. It now only take 2 weeks to get an approval and the buyer closes with very few bumps in the road.

So...in the event that you actually get a short sale approved at an investor price, you better have a buyer and he better be paying you outside of escrow. A double escrow on a short sale is a great way to waste a lot of your time.

This is a back-to-back closing, not a double closing. Well from what I understand, a double-close involves the C buyers funding closing both transactions. And a back-to-back involves each party providing their own funding (this is where the transactional funding is used for the 'B' party).

Yeah use that clause and I guarantee the bank will laugh in your face,throw your file in the trash and tell you to get out and never bother them again.

Banks are anal these days not investor friendly they only care about themselves and no one else.

So...in the event that you actually get a short sale approved at an investor price, you better have a buyer and he better be paying you outside of escrow. A double escrow on a short sale is a great way to waste a lot of your time.

You can double close but I wouldn't tell the seller about it. I used to use a double close on my options but it is damn near impossible in California now. I have not been able to find an escrow company that will do it for almost 2 years.

If you are looking for a way out of a contract just put an interest rate restriction in the contract. It's apart of most standard real estate forms and it guarantees you get your deposit back all the way up to the last day.

Keep looking...you live in CA...I'm sure there are a few title companies that understand double closings.

I am a little confused about having to use transactional funding. I hear some people say you don't have to and others say you do. Which is it? Are some investors just savvy enough to find title companies that will do the simultaneous close without transactional funding or are they just fortunate? This appears to be one of my biggest challenges getting started. There are REO's and Short Sales to be had by the droves where I live, but if I have to use transactional funding it will kill the profit potential. Suggestions??

No, you didn't misunderstand them. The insurance commissioner is coming down hard on title companies doing double closings. It's not a understanding issue its a liability issue. The restrictions are so tight on double closings because of agent secret profit RESPA issues. Also, the California insurance commissioner is auditing the crap out of title and escrow companies that allow a double close. To much liability to risk the transaction. Lock up the contract and sign a non circumvention clause. Make them pay you outside of escrow and if they don't pay you, stop working with them.

Remember, deposit checks are cashed when escrow opens and escrow should not be open until the contract is approved by the seller. Short sales and REO's are taking for ever to accept offers. Write the offer in one of your buyers names and then tell the agent that the buyer has moved on if they are not interested because the bank took so long to respond. Then tell them you want to substitute another partner for the same offer because you have multiple partners. Any substitution can be made before the contracts are fully executed. Just make sure the contract price meets all your buyers needs.

If you don't have several buyers in place you may want to set those up first and ask what their criteria is.