All Forum Posts by: Duane Ortega

@Drey Taylor

I couldn't agree more with your reasons for going with double closings.

Google transactional funding and you will find a list of transactional funding companies.  Transactional funding is different from hard money as most don't require upfront points or fees and the interest is typically 1.75%-2% vs. 12-14% for hard money.  It is typically for same day funding with back-end processing fees from $395-$495.

Good luck,

Duane.

@Alfredo Carrera

I have done double closings with several title companies in TX.  Not sure how close they are to you however.  Email me for the list.

@Leonard Knight

Transactional lenders typically give you proof of funds to get their foot in the door with the A seller.  Therefore, this is before your C end buyer even gets involved with you, the B investor.

To answer your second question, you have to sign a contract with A seller and control the transaction so that C buyer cannot "steal" the property.  If C wants it, he has to go through you first.

Good luck,

Duane

@Kenny Lewis

@Kenny LewisNo, it is not a law, and most of the time, it is not needed if you have a cash buyer.  However, if you have a huge profit or markup, some C buyers will raise an eyebrow and may give you a hard time.  Common terms in the transactional funding industry:  A=seller, B=investor/you, C=end buyer.  This is another common reason for large-profit wholesale transactions to use transactional funding.  Transactional funding requires 2 closings, and therefore you don't have to disclose to your C buyer how much you paid the A seller.  However, anyone, including A and C buyers can find out how much you paid for what after the closings via the county recorder's office.  C buyers, in theory, should not mind how much you as the B investor make, but in some cases, that is not reality.

Hope this helps,

Duane.

@Luis Perez

Should you go the double closing route, it is advisable to setup an LLC since you would need to do this eventually as you grow. Funders for double closings such as myself are not willing to lend to "residential" people who may occupy or reside in the homes due to restrictive residential laws. An LLC/entity portrays that a professional (someone who does this for a living) is double closing vs. John Doe, home buyer, and that we are lending a commercial loan to the LLC which is not subject to residential laws, usury laws, ... Our clients who double close usually setup one or more LLCs for double closing purposes only. The properties are in and out of their LLC. They don't have to be worried about getting sued for frivolous things. And they are funding friendly where we as funders can fund them commercially. They may have other LLCs/entities as well for other purposes.

Good luck,

Duane.

@Spencer Bowen

I am not an attorney.  My expertise is in funding double closings.  In my opinion, if it's ambiguous whether you pay excise tax for assignments, another way to skin this cat would be to double close, but negotiate with either A seller or C buyer so that they can pay for the excise tax.  In this way, you kill two birds with one stone:  You won't be accused of brokering since you actually closed on the first transaction, and someone will be paying for the excise tax(es).

Just my 2 cents,

Duane.

@Jerryll Noorden

You can sign the AB contract or BC contract in front of the other party, yes... not sure if that was what you were asking.

You must get a BC contract with your end-buyer signed asap.

LLC - I would recommend it. At some point you have to do this anyway as you grow. Most funders like me only fund LLCs/entities who will not reside or occupy the property. Otherwise, we will be subject to residential laws which is pretty restrictive.

Did I answer your questions?  If you have more, please email me (lookup my profile) or pm me.

Best wishes,

Duane.

@Hugo Salgado

If you don't have any money, wholesaling is usually the first "type" of investing neophytes pursue. With wholesaling generally, you can assign contracts or double close. It doesn't take a lot of funds to wholesale if you are willing to do the leg work. You can drive for dollars, knock on doors, network with REIA members, vs. spending money on marketing for example. When it's time to close, you can assign the contract and you your wholesale fee. Otherwise, you may double close. My expertise is in funding double closings. Feel free to lookup my profile, go to the "Press" page and review some case studies. We also have FAQs under our funding tab. There are other wholesaling exits strategies as well. These are just two. BP has a wealth of info that you can explore.

Good luck,

Duane.

@Jerryll Noorden

@Jerryll NoordenAB contract = contract between seller (A) and you the investor (B).  BC contract = contract between you the investor (B) and your buyer (C).  These are the terms used for the respective parties in a double close.  Typically, you would assign contracts, but if you cannot assign or would like to not disclose profits to any party, one should double close.  Feel free to look at my profile, go to our website, find the FAQs for funding, browse our Press Page for case studies to learn more about double closings.

Good luck,

Duane.

@Jerryll Noorden

@Jerryll NoordenI think every new wholesaler goes through the same emotions so be comforted that you're not alone :)  Since you are double closing, funders such as myself would need the executed AB contract and executed BC contract at the very least.  Therefore, you should definitely get a BC contract executed ASAP.  Then contact an investor-friendly closing agent/attorney/title company, contact a funder, and coordinate the double close.  I am more than happy to answer any of your double close questions.

Good luck,

Duane.