Difference between "double-closing" and "assigning"
Member since 2021 · 4 posts · 3 votes
Hi, i was going through some old forums and someone in the comments said......
"As far as actually closing on the property, since you're dealing directly with the seller you can either assign the contract, or use a transactional lender to close on the property yourself and immediately resell to your buyer inn a "double closing"."
what is the difference between assigning the contract and double closing? from what i know, double closing is getting the original seller under contract and getting the cash buyer to sign the assignment of purchase and sale agreement and take it to a title company?
Double closing: you actually close on the property in your name and sign a contract with your end buyer before you close to close with them again. (more closing costs)
Assignment: you have assignee sign a assignment of contract with non-refundable earnest money in hopes they will close.
Double closing ensures you will 100% close
Double closing is where you the middle man buys the proerty, and then immediately sells the property to the back-end buyer.
That way, you are not assigning the contract, and thus no one can acuse you of "brokering without a lisence".
There are severla ways you can do this..
You can either get a lender as you mentioned above, you can do it wioth your own money... and you could even do it with the back end buyer's money.
You could use his money to buy it and immediately sell it. Double check all I said with your local attorny though. You shouldn't take any legal advise from anyone, me included... her eon the forums.
Double closing: you actually close on the property in your name and sign a contract with your end buyer before you close to close with them again. (more closing costs)
Assignment: you have assignee sign a assignment of contract with non-refundable earnest money in hopes they will close.
Double closing ensures you will 100% close
Both of the guys above nailed it. 🤘🏼🦾. I hope that answered your question sir. 👍🏼
I work with wholesalers daily and they’re double closings. I always push for wholesalers to have transparency with both buyers and sellers so they can assign the contracts but there are always some scenarios or situations that lead wholesalers to using a transactional lender.
@Jerryll Noorden @Eliott Elias @Jesse LeBlanc
Thank you guys! Lets say i dont have and money to put down for closing costs, how would you go about the wholesale deal; Would you do the assignment contracts until you have some money to do the double-closing method, or would you try to get around the paying closing costs (legally) and try to double-close?
@Jerryll Noorden @Eliott Elias @Jesse LeBlanc
Thank you guys! Lets say i dont have and money to put down for closing costs, how would you go about the wholesale deal; Would you do the assignment contracts until you have some money to do the double-closing method, or would you try to get around the paying closing costs (legally) and try to double-close?
You don't really need any money for a double close if you use a transactional funder like myself. You do need to have a reputable buyer lined up and ready to go however. The buyer deposits their portion for the B-to-C transaction into escrow first, Once title receives the deposit and provide the receipts, then a transactional funder will deposit the A-to-B portion which normally covers the 100% of the purchase price.
First close is completed (A-to-B), then the (B-to-C) gets closed. Usually same day. You get your spread, and the transactional funder collects their fees at close.
@Jerryll Noorden @Eliott Elias @Jesse LeBlanc
Thank you guys! Lets say i dont have and money to put down for closing costs, how would you go about the wholesale deal; Would you do the assignment contracts until you have some money to do the double-closing method, or would you try to get around the paying closing costs (legally) and try to double-close?
I have done double closings before using my own money and I have done it through the back-end buyer putting it all forth.
It doesn't really matter which way you do it. Rigtht now, getting money should be priority. The best way to get money is to make reliable deals consistently, and not sporadic deals with super high assignment fees.
So just get the deal done, get your pay check and use that paycheck to get more leads.
Work on a relationship wiht your cash buyer so both of you can begin trusting eachother. Opportunities will arrise when both of you trust eachother.
So right now just get a few transactions done and you will grow
if Possible @Blaine Baker once you have a few buyers lined up and find what they're looking for, I suggest you remain transparent with your sellers to let them know that you might be assigning the contract or you can always word it as your business partner or investor might be the one who steps in at closing to sign the docs and that you might not be the one at closing.
But I'd try to get a few deals under your belt before thinking about anything creative. Assigning will also help you keep the most profit vs double closing. But again, with some scenarios, it will be needed but cross that bridge when it happens. Focus on your buyers now, then the criteria and start locating houses and sellers, then we'll get to the contract or assignment then and get you on your way to being successful. Don't just lock up a contract, then go blasting it all over to find a buyer only to stress yourself out and possibly piss off the seller or lose the deal. Be honest & transparent, this will help you to keep the process SIMPLE and easy with minimal stress.
@Jerryll Noorden @Eliott Elias @Jesse LeBlanc
Thank you guys! Lets say i dont have and money to put down for closing costs, how would you go about the wholesale deal; Would you do the assignment contracts until you have some money to do the double-closing method, or would you try to get around the paying closing costs (legally) and try to double-close?
If you have no money at all, like your bank account is between $1-500.00 kind of thing, always know your buyer's money is what funds the deal. Even the EMD comes from your buyer. You're sourcing the deal. You're getting paid because you structured a briefcase full of cash, the potential profit to be made because you found and structured the deal. Think of it as syndication. Don't think of wholesaling as for those who are broke with no money just because you can literally do deals with no money either. The "no money" thing creates too much of a fog for most of us starting out.
My first deal I ever did I have $47.00 in my bank account, the EMD was $100.00 and nothing even came out of my pocket. BUT, I had 8 buyers who did have cash for the EMD, financing, private money lending who've closed multiple deals who were ready to go. So once I sourced the deal, controlled it with a contract and assigned it, I brought the paperwork to the title company. Gave the seller and buyer details and waited for a check. It was literally that simple. Even my buyer said I was working too hard after the fact.
I know I said a lot but I share that because without a doubt an assignment of contract is the only way to go if you literally have no money. Just my take.
Assingment: Assigning a contract is the simpler of the two. You get a property under contract with the seller, then transfer (or assign )that contract to your end buyer for an assignment fee. You never actually take title to the property. The end buyer steps into your shoes, closes directly with the seller, and your fee is collected at closing.
A double closing involves two separate transactions happening in close succession — sometimes the same day. In the first transaction you actually purchase the property from the seller and take title. In the second transaction you immediately resell it to your end buyer at a higher price. Your profit is the spread between the two.