Reversed double closings?

Question

Can a double closing be done as where u would close with buyer 1st then use their funds to close with seller then everything get recorded after? To avoid having to use a transactional funder and their fees. Greatly appreciate any replies!

Teri M. · Answer

Thanks!

Steve Babiak · Answer

Whenever there are multiple names owning the deed, you will need to get all of them to agree to sell their portion.  This could be easy if all of them just want dollars; this could be a challenge if somebody is sentimental and emotional about the memories in the house.  You should find out to what extent the other eight might be motivated to sell, otherwise you could put in lots of effort for a non-candidate house.

Teri M. · Answer

I explained to the title attorney exactly what i planned on doing and that it would be 2 different closings like an hour apart or something and he completely understood and has done this before. He even said he would give me discounts on the closings if I come to them on most of my deals.  I know I will have extra closing cost doing a double, I will just make sure that works out when I figure the numbers. I got in touch with one of the property owners on a house that I think will be a possible deal and they are thinking about selling soon but 9,yes 9 owners are involved!! Her grandfather built the house in 1898 and when he died it was passed on to 9 family members. Only 1 of them(the one I talked to) lives in the house. She is old and the house is too big for her to handle anymore. It needs to be rewired and fully updated. It's a 2 story on a corner lot off the highway. Has 7 bd, 3 bth and 2 kitchens. she said part of upstairs could be made into apt.It doesnt look like it has ever been remodeled on the outside, kind of looks creepy! It is really a huge house.When I go see it I will be able to see exactly all the problems then figure the numbers but should I even try to get involved being that it has 9 owners?!?! What do u think? It was appraised for 200,000 in fall of 2007.

Brian P. · Answer

Teri

Just to let you know what you wanted to do the first time is really a simultaneous close or a "dry" close where you use the funds from the second part of the deal to close the first part.Even though this is legal, it is getting much harder to find a title company to do them.and lenders are putting in conditions to prevent them.

What your now going to do is a true double close or "wet" close where each transaction is funded separately. But even title companies are misusing the terms and think you want to do a 'dry" close and say no where you are really going to do a "wet" close, which is two completely different transactions, no different then if you bought now and sold a year later, except your doing it quickly.

Now your on the right track wanting to save flash funding fees and dual closing costs. You can save on these and put them in your pocket by using a couple of methods that use a single escrow..

Don;t have time to go into all the details now and don't know when I'll be back after this session but I'm sure you can find details in the archives.

Teri M. · Answer

I know huh, I was trying to avoid funding fees but I guess I will deal with it for now.I will definately add them in, no doubt! Finally fixed my contracts with what the attorney told me to add it, I officially have a good one page contract now!! Now I just need to find the deals!!

Jeff Warner · Answer

That's good news Teri. Seems like a lot of title company's don't want to close with the buyers funds anymore. Just make sure you add the cost of the transactional funding into your numbers when your making offers. Some charge different rates based on the amount loaned, others charge a flat 2 points so there can be a big difference in cost. Good luck.

Jeff

Teri M. · Answer

Thanks for all the info! Update, consultation with the title attorney went great! He seems very experienced with double closings and explained everything to me, even looked over my contract, it is all good but he told me to add a couple of things to it. I have to use transactional funding for the 1st though, he will not close with the end-buyer 1st. Its all good though! Thanks for all the help again jon and jeff!

Jeff Warner · Answer

Teri,

Jon has given you some great advice. When it comes to finding owners of vacant properties, go online and see if you can check records at your local tax assesor website.

In my county I can check everything online, it will tell me what they paid for the house, when they bought it, what the annual taxes are, what the owners name and forwarding address is, etc. Since it's public record you can also call the tax assessor and see if the property taxes are current. The only reason I do that is so I know if they are keeping it current, most of the time I've found the ugly houses are not current. Don't get too caught up in this though, you can play online all day with this stuff and never get anywhere. I only dig deep like that if I think it's going to be a GREAT deal. The only way to be successful when it comes to wholesaling is to make lots of offers. Know your market, know your buyers and understand what makes a good deal and then go find them.

Like Jon said, the gurus try to make it sound easier then it is. The reality is, making good money is not easy no matter what technique you use. Learn to wholesale then study other ways to make money in Real Estate so that you can take the blinders off and turn those not so great wholesale deals into something else, like a Lease Option or some other type of owner financing, etc.

Good luck. The best part about this website is that there are lots of people willing to help for FREE.

Jeff

Jon Holdman · Answer

Not an expert on this.  Read in the wholesaling forum for some more ideas.
          
          Bandit signs.
          
          Direct mail to those folks on your lists.
          
          Driving around and noting vacant houses, researching the owners and direct mailing them.
          
          Non-owner occupied.  County records will show this. Mail them.
          
          For rent signs.  Call enough and you'll find someone who would rather sell than rent.
          
          Code violation lists from the city building department.
          
          Fires.

Any of the mailings are going to take persistence.  Multiple letters over a few months will eventually produce some results.

You can also try shotgun offers on lots of properties with lowball offers.  That will require a cooperative agent.  Or, you could just fax the offers directly to the listing agent.  I've heard of software to do this, but haven't really researched it.

Lowball offers on old REOs.  Ones that have been listed for six plus months.

FSBOs

Bankruptcy lawyers

Probate lawyers

Jon Holdman · Answer

Yes, its better to find your own deals.  Your job, as a wholesaler, is to find deals, to find buyers, and put them together.  If you're just passing along someone else' deal, you're really just bird dogging, and the pay's not nearly as good.  I've yet to see any wholesaler show up with a great deal.  If two of you are involved, there's that much more cash being taken off the table.

I really don't think this is nearly as easy as the guru's make it out to be.