Investor · Collegeville, PA · Member since 2020 · 22 posts · 6 votes
Hi BP,
I am currently in the market for a new closing company for my wholesaling business. I have gone through a few in the Montgomery County, PA region but wanted to hear from the community to see if they had any positive (or negative) experiences with some in this area that I can go and contact or research to find out more about them.
This is such a common question and I still don't understand it. What makes any title company "wholesale friendly"? Any title company can perform their title work on any transaction so long as the transaction is legal and insurable. Where most run into trouble is when they are looking for title companies that are OK with simultaneous/concurrent closings where the funds to purchase the A-B transaction are funding by the B-C transaction where A is the original seller, B is the wholesaler and C is the actual buyer. These types of transactions are not welcomed by just about all title companies these days. Other trouble is when a wholesaler who is unlicensed, is assigning the contract, and collecting a fee for brining buyer and seller together which is brokering without a license in most states. But these are NOT the only way to wholesale!
You could borrow funds, close on A-B transaction, take title, then list and sell for more and keep your spread. Perfectly legal and any title company can do this. Or you could form a new entity or trust, have your buyer in hand from the start and sell your shares or transfer your rights in the trust at closing, no assignments, no brokering without a license!
I strongly urge you to read this thread: https://www.biggerpockets.com/forums/93/topics/58383-the-truth-about-wholesaling-
With almost 900 replies over 11 years and a record 560+ votes for original post, it is a long but worthwhile read.
@Will Barnard Thanks for the insight Will, I will be reading that post. What you outlined sounds like a double closing, why is that not welcomed by most companies? The only state I have also seen institute a need for a license is Illinois and then in Philadelphia county.
@Geoff Salfi - There are two types of "double closings" and the concurrent/simultaneous close where you use your end buyers funds to close your initial A-B transaction is where title companies take issue and most will not do it. A double close where you bring your own funds or borrowed funds (like transactional funding) to close the A-B and then 1-3 days later close on the B-C is perfectly fine for most title companies.
@Will Barnard thanks for the reply will, appreciate the insight. I'm about halfway through the link you sent yesterday and have definitely picked up on a few things. Very