BiggerPockets

Not Getting the Hud-1 thing! If I am double closing using flash funding in the 1st transaction then 2nd closing with investor that brings all cash, why is hud-1 involved in second closing? Doesnt hud-1 have to do with buying with a loan? Experienced investors that do double closings please explain the closing process, Kind of confused, thanks!

You're confusing government sponsored loans, like FHA, Fannie Mae and Freddie Mac with the "settlement statement". A HUD-1 is a standardized settlement statement. No idea if its not required under some circumstances, but I've never done a closing without one.

Speak with your title company about what they will and won't do.

Teri-

You can do either but it usually goes in escrow.

Becareful not communicating what you are doing with the seller. If they are a cash buyer (and a repeat buyer) you definitely want to establish a relationship with them. If they are getting a great deal from you, they won't care what you make on the deal.

I heard of wholesalers on hear saying they make the buyer pay them a non-refundable earnest money deposit to make sure they are serious that way if the buyer happens to back out at last minute u still made money on the deal. Just want to make sure of everything that can be done, any other replies would greatly be appreciated!

Teri, if its my first time doing a deal with a buyer I will require a $2,000 non-refundable deposit. After a couple of repeat buys with the same buyer, i will lower it to a $1,000. Once a relationship has been built between me and that buyer a deposit becomes unnecessary.

According to RESPA, a HUD-1 is required on all federally related loans. Now I've never seen any specifications on the seller/buyer only seeing one side or the other, and I've done several transactions where the seller/buyer did only see their side of the transaction. I have also done several deals where there was no HUD-1 at all, just as Robert mentioned, but they were on cash transactions.

As for earnest money, you should pretty much ALWAYS get earnest money when you are selling a deal. Now I personally prefer the buyer to pay me directly rather than the title company so I don't have to hassle with getting a release of earnest money from the buyer if and when they back out.

Even if the buyer paid the earnest money to the title company directly, you could still get the money as long as the buyer doesn't have a legal right within the contract to back out and get his earnest money back. That would be determined by the contract and by your state's contract laws.