All Forum Posts by: Jesse LeBlanc

Quote from @Victor Garcia:

Hey everybody, first post here. I buy and sell land in South Carolina and have always bought properties myself or bought them with partners but I wanted to see if anyone knows if double closings are legal? It seems like there are very few title companies that allow partnerships on a property let alone I doubt they would do a double closing transaction. Does anyone have experience with double closings in SC?

Thank you!

 We do quite a few double closings in South Carolina each month.  It’s not illegal to buy a house and then sell the house you own.  

Quote from @Hadas Arazi:

Hi everyone,

New to wholesaling/real estate investing 

I'm wondering how foreign wholesalers double close in case needed? I'm talking specifically about FIRPTA

Not sure if I can even use transactional funding for double closing as the title will hold 15% from the purchase price if I understand FIRPTA correctly, that mean I won't be able to return the loan immediately? 

Would appreciate any advice

 Good Morning @Hadas Arazi, as for the Transactional Lending, your loan on a double close will be paid back right away, so don't worry about that.  The taxes come off of your profit/spread and might be withheld but won't have anything to do with the Transactional Lender. :)

I've funded many double closings for some friends that live in the UK and work here in the states.  I am not 100% clear on the process for taxes thereafter for them, I know enough but would rather someone more experienced to chime in if needed.

Otherwise, I might be able to refer them to a friend or two who does short term loans for 3 months or less to be able to control the deal then wait for their refinance if more time was needed.  But it's best to stick with trying to make them happen on the same day to save a LOT of money vs the short term loan paying 2-3 points plus interest when if a double close with refinance it's merely the 1% T. Funding fee and no interest, no other fees.

Good Afternoon @Mahari McTier A loan or all cash means the same to the seller, it all is cash to the seller at the end of the day. They might mean they don't want to deal with a lender and delays and wants a legit cash buyer possibly.

IF there is enough equity in the deal, sometimes it's good to have a refinance lender ready to go.  Then you can use a us as a Transactional Lender to fund the first purchase and same day the 2nd transaction which is the refinance.  We do this a lot for clients.  It's a double closing, just have to make sure their lender is ready to go and be transparent with all parties as the seller won't care because they're getting the price they want, the buyer will be able to bring less or no money out of pocket for the refinance (if there is enough equity) and then everyone wins. :)

Quote from @Peyton LaBarbera:

@Jesse LeBlanc Do you the wholesaler need POF in an assignment contract wholesale deal or is your end cash buyer responsible for providing that. I only ask because I don't want to double close with a hard money loan and I don't have the funds to show

You don’t need a POF. However, sometimes agents or sellers will ask. If so, you can provide a bank statement or a legit POF.

you should go buy the book “if you can’t wholesale after this I’ve got nothing for you” by my good friend Todd Fleming. It will take you step by step the legit and ethical way to wholesale the right way.

Quote from @Peyton LaBarbera:

And just to clarify when I disclose the EMD with the buyer is that in the P and S contract or assignment contract?

And do I have 2 P and S contracts one for the seller when I get the deal and one for the buyer when I close or just one p and s contract and the assignment contract transfers that p and s contract to the new buyer?

Thank you to all for being so helpful, from now on I will come here for all my questions about wholesaling sometimes google just doesn't do the trick

 ONLY if you're double closing will you need 2 separate "purchase & sale" contracts.  When you're assigning your contract, you will have just that, 1 original purchase contract and 1 assignment of contract.  so 2 contracts but 2 different documents.  The first is with you and the seller agreeing to buy their house.  The 2nd is with your buyer, assigning your original contract to them for a specific fee, they then step in as the buyer.

Quote from @Peyton LaBarbera:

@Jesse LeBlanc Ok I see that makes sense, one last question is do I pay taxes on my EMD if it comes back in one check from the closing company or is there a way to break it down on paper when filing for taxes since it is not income?

No, it was not considered Ordinary Income. This is merely a wash. $1 out and $1 back in, $0 net profit, no ordinary income to report, no taxes paid. IF it were EMD you kept from a buyer that didn't perform, that would be income and taxable.

Quote from @Peyton LaBarbera:

Quote from @Eliott Elias:

You pay the earnest money deposit initially. And you also require an earnest money deposit from your cash buyer. Your deposit gets refunded to you. The cash buyers deposit is applied towards the purchase price. And is nonrefundable.

So for the term "have my EMD refunded to me once the deal closes" do I put that into the P&S agreement or assignment contract?

Anyone who has some insight can respond too, thank you.

You can simply email the closing company since your buyers EMD is there and get it anytime. You can also wait until it closes, then the closing team can add your original EMD to the assignment fee all in one check/wire.

If you are double closing, then your EMD will be independent of your buyers and must remain with the closing team until closing.

@Peyton LaBarbera EITHER actually. If you already have a buyer lined up vs marketing the deal to go find a buyer after you sign a contract with the seller, then you can have your end buyer send the EMD.

If you don't have a buyer lined up right away and let's say your contract says EMD within 3 days, then legally YOU should be submitting EMD within those 3 days to secure that contract or else it could be null & void if you don't.

I used to simply have $100 as EMD on my contract, only rare cases was my EMD higher.  For my buyers it was a min of 2k but usually up to 5K non refundable to make sure my buyers were serious in the event I was working with someone new to me.  Yes 100% you should make sure that your buyer is serious and submits EMD, I would suggest it being non-refundable but also in your assignment make sure that the EMD goes to you (minus what you owe to the seller) if the buyer backed out last minute and screwed you and the seller over, making sure you can then pay your seller the EMD as promised on the contract if they didn't allow you to continue trying to find a replacement buyer.  This is where transparency with the seller is important.

If you submit EMD then later your buyer submits EMD, you can simply request your EMD back from the closing team or you can have the closing team add that to your assignment fee and allow the extra EMD to be applied to your buyers.  It's all a wash at the end either way.  

@Riley Huseby also go buy the book "If you can't wholesale after this, i've got nothing for you" on amazon by my good friend Todd Fleming.  This will show you the RIGHT way to wholesale, legal and ethical way, minimal stress just as I mentioned above vs merely locking up deals overpriced, pissing off sellers, backing out of contract, being greedy and not caring about sellers etc like so many others out there who give wholesalers a bad name.