Just starting out with wholesale real estate in Denver! Does anyone have a laywer they are currently using or have used in the past. Also Im willing to do some free leg work in exchange for some mentoring!!
Title companies do closings here. Not attorneys, like in some areas. Try to find a transactional lender. They will fund the first closing (your purchase) and get repaid from the second closing (your sale).
so your saying can't legally do a double close in denver with no cash of my own? but I can do assignments meaning both parties can see how much I make on the deal?
so your saying can't legally do a double close in denver with no cash of my own? but I can do assignments meaning both parties can see how much I make on the deal?
Not sure about legality. You should talk to an attorney like @Drew Fein about that one. I don't know of any title companies anymore that will double close without you bringing funds.
Thanks for the shout out, @Matt M.! @Oliver Fisher, double closings aren't illegal in CO, it's just that no one in town seems to do them without you putting up the funds.
Title companies do closings here. Not attorneys, like in some areas. Try to find a transactional lender. They will fund the first closing (your purchase) and get repaid from the second closing (your sale).
When people mean by bringing cash to the closing is that you must have funds to close -- whether they be from your own pocket or someone else's pocket. With a double close, the parties are A=Seller, B=Investor Buyer (you), and C=End Buyer. What you cannot do is use the funds that the C Buyer brings to escrow and pass those funds through escrow and use those funds to pay off the A Seller.
If you Assign the deal, no cash is needed because the C Buyer pays you to step into the deal in your place. It becomes an A to C deal. If you double close, no cash is needed because you can get cash from Transactional Funding to close the deal.
@Drew Fein! So basically I have to find a fearless lawyer, use a transactional lender, or keep assigning deals until I have enough cash to start closing myself? Also, @Jon Holdman have you used any transactional lenders in the Denver area? How much do they take off the top? Is it easy to get approved? Sorry for the late reply guys My grandmother took a nasty slip last week and I had to take an emergency flight back to GA. Thanks again everyone for your wisdom biggerpockets really is a great group of people!!
@Oliver Fisher, sorry to hear about your grandmother; I hope she's alright. You are correct: you either need to (a) find a transactional lender or other source of funds to close or (b) keep assigning deals until you have said funds. Best of luck!
Its been a while since I spoke with a transnational lender (I'm not a wholesaler). Last I did their rates were 1-2%. They're not really approving you but rather your end buyer. They want to be sure the end buyer is going to close and you're not going to get stuck with the property.
@Oliver Fisher there are a number of title companies in town that do double close using the funds from Buyer C to fund the purchase from Seller A. I have done a half a dozen of these transactions. You have to work to find them but they exist and they have been named in the BP forums as well. They are not all so user friendly. Some require complete disclosure but some do not. It can be done.
I looked into transaction lending for a deal and found them to be rather difficult. It seems they want to be fully protected if by some wild series of events they ended up owning the property. I didn't shop around too much but their business was solely transaction lending so I figure they use the "industry standard" rules.
@June Broce We do a ton of Transactional Lending for wholesalers looking to double close, some investors who are doing seller finance deals or same day purchase and refinance into a DSCR loan.
If you can assign the deal and save yourself some money, it's the better option but I 100% understand why someone also prefers to double close and secure their profits depending on the scenario.
With that said, you can buy/sell the land SAME day for a legit double closing. I highly suggest that you find your buyer first, know what they are willing to pay for it, then negotiate with the seller to a lower price. Then from there choose to assign or double close and if the latter then set it up with the closing team for the same day. You can then use Transactional Funding if you choose, otherwise if you planned to buy the land then sell it later, you'd have to get a different loan type, which inevitably will cost you more plus longer hold time and greater costs over the double close and certainly over an assignment of contract.