BiggerPockets

I am looking to do a double close on a reo property but I am not clear on how the agent comes into play. Should I contact one, or should I contact the listing agent. Would I have to take my end buyer to that same agent?

If the whole situation is done with the listing agent, do they get quadruple paid? Wouldn't that warrant some negotiation for a further discount?

While Jon touched on the agent commission dilemna, you have an even bigger problem. How do you expect to double close an REO these days?
Who are you selling to? If your buyer is an all cash buyer investor, then yes, it can be done. If your buyer is an end user buyer using FHA or even conventional financing, how do you expect to double close? The thery is ok, but in th ereal world, it is not that simple.

Double close is the best way to handle an REO flip. The seller will not allow assignments, and some will refuse to sell if you buy in an LLC.

Your problem is the back end. I think you mean the buyer is getting FHA financing. No chance of closing this with a double close. FHA requires a 90 day seasoning. The seller must own the property at least 90 days. Getting around this has been asked a few times recently, but I haven't seen any scheme to accomplish this.

Realistically, for double closes you need cash buyers or buyers with hard money.

Double close is the best way to handle an REO flip. The seller will not allow assignments, and some will refuse to sell if you buy in an LLC.

And you could have a porblem with this as well. Since the bank chooses the title company and often times, they own it, that title company will not do a double close for you.

This is one of many reasons why paying all cash and having an all cash buyer are necessary so you can close with the bank then close shortly after with your own title company and your own cash buyer. Or you can offer the bank all cash, offer to pay all clsoing costs, and thus choose your own title company, but some banks still will not go for it. (Banks are wierd that way, go figure!)

Originally posted by nationwidepi

The thing everyone needs to understand here is that banks, the government, both Federal and state, along with other agencies,have made investor flipping much more difficult these days than just last year.
We all need to develop, create, and or learn alternative strategies to get things accomplished (legally of course).

I second that. Most of the people that I have been in contact with are first time home buyers. This is the first one to go thru the whole process with me. Im glad she isn't high strung cause that would have been more than an oversight.

Thanks yall for the advice, you prevented several problems.

Sorry to give half the info but I remember a company that acted as a double escrow fund. In California a double escrow is next to impossible and Banks want the owner of the LLC or trust to match the signer. However, there was a company that would let you use there money for a week for 3 points. You used there money to close the first escrow and the new buyer paid them off when they closed. I am not sure if anyone like that is still around but it would be a kick ass money maker now.

You can wholesale an REO with transactional funding, but you can't do this with an FHA end buyer. You can use transactional funding to buy and then to sell.

Doing double closings will be very difficult with FHA buyers regardless of the 90 day rule lifting as they rarely close in time and many will not process until the seller is actually on title.

If you do use transactional funding for double closings, I highly recommend you have your end buyers use conventional loans through a loan broker you have lined up ahead of time who is comfortable with your back to back closing scenario or all cash buyers. Trying to do so with FHA buyers will lead to problems you don't want to have.

As for the 90 day rule being lifted, I do agree with Ron that we should not be jumping for joy or thanking them, it was the morons in office that made the rule in the first place and the same or a different set of morons who placed all the stupid restrictions that are currently in place. It is all an effort to hinder the profitability of investors and stop free enterprise, which goes directly against what our country stands for. (Not meant to take this politically so lets not go there in this thread please)