Wholesaling double escrow Question

9 Replies

I'm a beginner wholesaler in Ohio and my attorney said that in order to do an assignment I need funds to close on the property initially then if I want I can assign the contract to an end buyer. I'm just starting so I don't have Funds available. So instead of doing an assignment could I do a dry double escrow Closing where the end buyer will bring funds to close both AB and CB transactions? 

Do I have to bring wet Funds to close the AB transaction or can the buyer fund both transactions?

Originally posted by @Ben Sears :

I'm a beginner wholesaler in Ohio and my attorney said that in order to do an assignment I need funds to close on the property initially then if I want I can assign the contract to an end buyer. I'm just starting so I don't have Funds available. So instead of doing an assignment could I do a dry double escrow Closing where the end buyer will bring funds to close both AB and CB transactions? 

Do I have to bring wet Funds to close the AB transaction or can the buyer fund both transactions?


Great question. I was talking to a Wholesaler yesterday about this very issue. First - follow the advice of your attorney! But, I don't think he has funding available for his wholesale opportunities, but could get them if he can't find a buyer. In other words, the risk is great if you don't have access to funds. Good luck! What part of Ohio are you working in?

 

Originally posted by @Ben Sears :

I'm a beginner wholesaler in Ohio and my attorney said that in order to do an assignment I need funds to close on the property initially then if I want I can assign the contract to an end buyer. I'm just starting so I don't have Funds available. So instead of doing an assignment could I do a dry double escrow Closing where the end buyer will bring funds to close both AB and CB transactions? 

Do I have to bring wet Funds to close the AB transaction or can the buyer fund both transactions?

You can use transactional funding so you never have to have the money. 

Here is a good video The Ohio Division of Real Estate made about wholesaling in Ohio https://www.youtube.com/watch?v=9fi54S8nwUA https://www.com.ohio.gov/real/

Originally posted by @Ben Sears :

Thanks for the response! I'm from Columbus Ohio. Do you know any title companies in Columbus that do double escrows?

 Yes I do

I suspect what your attorney may be trying to say is that you must have the availability of funds to close on the deal, even if your plan is to assign it. So you must have the means to do the deal regardless of it you are able to assign the contract. The link provided above about wholesaling in OH is an excellent reference video.

Technically, when you Assign a contract, you are selling the right for another buyer to step into your position as the buyer. In exchange for this, the Assignee pays you the Assignment Fee. When the contract is Assigned to this new buyer, you are no longer a party to the transaction. Your contract must be Assignable for you to be able to do this. Your attorney can advise you on this

Or, perhaps in this particular case, your contract is not Assignable. If that is the case, you must first close on the property using Transactional Funding (the A-B transaction) and then follow with an immediate second transaction (the B-C transaction) closing with the End Buyer. A=The Seller, B=You the Wholesaler, and C=The End Buyer. That would not be an Assignment; that would be a brand new closing.

I know of two Title Companies in Columbus that do double closings. I think BiggerPockets rules prevent me from posting their names and contact info. If you PM me I can provide you with those details.

@Ben Sears I just got finished offering Transactional Funding for several wholesalers there.  One of them used "Title One Closing & Escrow Co.", Micah Riley at Mriley @ titleoneohio. com I'm sure I could dig up some others as several of my friends are in Ohio

Originally posted by @Ben Sears :

I'm a beginner wholesaler in Ohio and my attorney said that in order to do an assignment I need funds to close on the property initially then if I want I can assign the contract to an end buyer. I'm just starting so I don't have Funds available. So instead of doing an assignment could I do a dry double escrow Closing where the end buyer will bring funds to close both AB and CB transactions? 

Do I have to bring wet Funds to close the AB transaction or can the buyer fund both transactions?

 Hi Ben, this isn't necessarily true, you don't need the funds to close since you won't be closing on the property. You should look into transactional funding. Some title companies offer it and it's great for double closings.