Can you buy and resell a property at the same time?

Question

Hello BiggerPockets community, hope everyone is safe out their .

*Scenario: I find a home for 500k and seller is willing to pay half of closing .

You know someone who wants the same property.

*Question : Am I able to get into a contract for purchase of the property for 495k ( if seller is willing ) and sell to the other buyer for 500k?

Will I be able to give the same conditions to the buyer (half of close )? Would this be considered a double escrow ?

*Disclaimer : I do not have a RE license . I live in California .

Thank you.

Ibrahim Hughes · Answer

@Jonathan Cerulli

Here's one way. I think it was veteran RE attorney Bill Bronchick who called it a 'reverse wholesale'.

See if seller will allow you to put a $5k mortgage on the property representing your fee. Cancel your contract and allow the new buyer and seller to contract directly. consult an attorney to structure so that you're protected.

Hugo Alves · Answer

@Jonathan Cerulli

No, FHA has a 90 day rule. Meaning you can’t purchase a property until 90 days of the deed being recorded.

Jake B. · Answer

@Lydia T.

Thank you for your responses.

Hypothetically speaking, the buyer (person I am selling to ) would be using FHA loan to purchase property.

With that being said , is their anyway to make a profit without being an agent ?

Lydia R. · Answer

@Hugo Alves Oh your buyer is using traditional bank financing? Then no there isnt a way to get paid if you arent a licensed agent.

Hugo Alves · Answer

@Lydia T. That will only work with they using nontraditional mortgage or cash. Traditional mortgages won't allow a wholesale or marketing fee on the HUD.

Lydia R. · Answer

@Jonathan Cerulli This sounds like basically a wholesale deal. Put the seller under contract for $495k and then assign to buyer for $500k

Hugo Alves · Answer

Jonathan,

No familiar with CA RE laws but can't you just insert your buyer and take a commission on it? with such a small amount of profit, won't make sense to double close and wholesaling it may not work unless the new buyer is cash....

Can you buy and resell a property at the same time?

7 Replies