This article is part 3 in a 5 part series, where I will be explaining the various methods available for closing REO wholesale deals, and getting around the “No Assignment” clause that most banks include in their addenda.
Today I will be focusing on doing double closings.
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What is a Double Closing?
Just like a simultaneous closing, when doing a double closing, there will be two separate transactions taking place- the A-B transaction where you are buying the property from the bank, and the B-C transaction where you are selling the same property to your end buyer.
If you’ll remember from my first article- when doing a simultaneous closing, you are using your buyer’s funds to fund both the A-B and the B-C transaction. Since many title companies will not perform simultaneous closings, you can elect to do a double closing instead. In this case, you will have to bring your own funds to the closing table to fund the A-B purchase.
If you do not have the funds available to purchase the property, you can borrow the money from a transactional funding source. There is no credit check or income verification required when you are using a transactional lender- the only stipulation is that you must have an end buyer lined up to purchase the property immediately after you purchase it from the bank. Transactional lenders will not fund your deal unless your end buyer is in place and ready to purchase the property.
If you decide to close your REO wholesale deals by doing a double close and using transactional funding, keep in mind that there will be fees involved when borrowing the money, so be sure to factor that in when you are formulating your offer.
Next week I will be bringing you part four of the series, so stay tuned..