double escrow question

9 Replies

correct me if I'm wrong but today had an appointment with a seller, everything was going good but when I told her I was planning on doing a double escrow she backed out. She had said that it was illegal to do this. Is this true? I am fairly new to wholesaling an would like some clarity on this. Any info would be greatly appreciated.

@Damien Fausto  double closing isnt illegal if using wet funds, why in the world would you ever tell homeowner this? Let me know if I can help you. 

@Jeremy Tillotson she just happens to be a broker. That didn't want to sell on the mls.

Kristine Marie Poe This is the main question that I wanted to pick your brain about. 

There are other ways to get the deal done besides a double closing/escrow.  They aren't illegal but it's not that easy anymore to find an escrow company/agent these days that will use your end buyer's fund to close your purchase.

I suggest you don't start off negotiations with a seller by telling them you're selling to someone else at a mark-up without closing with your own funds.  Think how you would react to that:  Sure, I'm happy to buy your classic Corvette or Porsche for $10K.  Just know that I'll be arranging escrow services......because I don't have $10K, but I did find a buyer for $20K.  Even the most unsophisticated seller will think they can find the buyer for $20K themselves.  Which they can't.  But in the meanwhile your deal is dead.

What are the numbers?  Like I said, there other ways to get the deal done.

@K.Marie Poe They were asking $380,000 for a 3 bedroom/2 bathroom 1400 square feet. We would have negotiated a bit lower, but then they shied away from us being wholesalers. Comps for the property were $450,000+

Kristine Marie Poe My friend is having trouble tagging you in the post (we're newbies)

Originally posted by @Damien Fausto :

@K.Marie Poe They were asking $380,000 for a 3 bedroom/2 bathroom 1400 square feet. We would have negotiated a bit lower, but then they shied away from us being wholesalers. Comps for the property were $450,000+

Yeah, I'd probably shy away from you if you looked like you couldn't close and were only hoping/trying to sell it.  Does the property need rehab? For how much?  What makes you believe you can sell it for more than your contract price?  Do you know the market, do you have buyers? 

Kristine Marie Poe 

When looking at the property I had estimated about $17,000 for rehab. It was mainly just an upgrade to the kitchen and the restrooms. When doing my research of the property I found comps of $451,  $457, and even up to $464. The home itself is in a good area near shopping centers, freeways.  We do have buyers in that area that are willing to go up $1.5 million.

I don't see the profit.  Rehabber buys for $380K plus costs, rehabs for $20K, commissions and closing is $30K+, holding costs (taxes and insurance are) are minimum $2K.  If the rehabber has hard money or lender costs there's maybe $10K in that deal.  

Regardless, if you have cash buyers or buyers with hard money you don't need a double close.  Get the property under contract and assign your contract to your buyer..

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here