I'll be brief.....
I've been trying to get my questions answers from the site but I've been getting mixed answers.
Just so I am clear, after I have the property under contract, am I supposed to leave an earnest deposit with the owner and go find a buyer? Or I am supposed to take the contract and deposit to a title company? (I'm in Maryland by the way) From there, what is my next move? How does the double closing actually work?
Also, is it best to put the contract in my companies name or my name?
First why double close when you could just assign the contract? I always put ernst money with title company. Always put contract in company name in case something goes wrong. Make sure contract is signed before you try to find buyer. Good luck and message me if I can help.
Personally, I'd bring the contract and deposit to a title company. You could end up with a sketchy buyer who claims you never put any money up since there is no official record of it.
A double close is two closings. You bought from Buyer a house for the price of 100,000. That is one transaction that will need to close on its own(lets call this Transaction A). As a wholesaler you are selling the same home to Seller for $120,000. This is another separate transaction (call it Transaction B) that needs to be closed. Some title companies will allow you to close on Transaction B first and take the money from that closing and apply it to Transaction A. By doing a double transaction The Seller and Buyer never have to meet and neither one learns you made a $20k profit. They both might be a bit frustrated with you if they know you made 20k for not much work. Keep in mind, with a double close, aka, a simultaneous close, you do own the home for the amount of time it takes you to sign papers.
If you're not doing a double closing the seller and buyer will see the original sales price and the final sales price and can do the math to know what you made. In this case you are never actually owning the home because you are selling the contract. You will need another piece of paper called 'An Assignment of Contract.' Think of this 'Assignment of Contract' as a bill of sale for the actual contract. Using the numbers above your end buyer would be buying the physical paper contract for $20k because you have assigned(sold) the original contract to the buyer. Once he's bought the assignment of contract he now can spend $100k on the home.
I'd personally always use a business name and make sure to use the terms 'and/or assigns' after the name. If your contract doesn't have 'and/or assigns' or something else describing how the contract can be assigned at your will, then you cannot use an Assignment of Contract.
Man, explaining that as simply as possible is still confusing.
if you put contract in companies ..does company name go on your check to or your actual name will
Join the Largest Real Estate Investing Community
Basic membership is free, forever.