Alright, let's get into the nitty-gritty. That process involves two separate closings, and they usually happen on the same day or within a few days of each other. Here's the step-by-step breakdown.
First, you need a property under contract. You'll negotiate a purchase price with the seller and sign a standard purchase agreement. This is your "buy" contract. Make sure you have a clause in there that allows you to close on the realty even if you're planning to resell it immediately. Some sellers might ask questions, but honestly, it's none of their business what you do following that you own it.
Before you close on the first transaction, you need to have a buyer lined up for the second one. This is key. You don't want to own a property, even for a day, without knowing exactly who's buying it from you. Your end buyer will sign their own purchase agreement with you, at a higher price, and they'll typically have their own financing or cash ready to go.
Here's a pro tip: make sure your end buyer's closing date aligns with yours. If there's even a one-day gap, you might have to pay for insurance, utilities, or even a short-term loan extension. That eats into your profit.
If you don't have the cash to buy the property outright, you'll need a transactional lender. These lenders specialize in short-term, high-interest loans that last just a few days. They're not cheap, but they're effective. The lender wires the funds directly to the title company for your first closing, and then they get paid back—plus their fee—when your second closing happens.
Now, here's something interesting: some title companies won't allow transactional funding unless you work with their preferred lender. So it's worth asking the title company upfront what their policy is. You don't want to get to the closing table and discover you can't use your lender.
This is where the magic happens. You'll work with a title company or closing attorney to schedule both closings. Ideally, they happen back-to-back. Some title companies will literally do them in the same room, minutes apart. This funds from the second closing are used to pay off the first closing, and the difference—your profit—gets wired to your account.
Make sure you're clear on the closing costs for both transactions. You'll pay title insurance, recording fees, escrow fees, and possibly lender fees on both sides. These add up, so factor them into your numbers before you commit to the deal.
Once both closings are done, you're done. You'll walk away with a verify (or a wire transfer) for the difference between what you bought the real estate for and what you sold it for, minus all your costs. If you did your math right, that's a nice chunk of change.
Honestly, the double close strategy isn't for everyone. It requires a certain level of experience, a good network of professionals, and the ability to handle stress. If you're just starting out in wholesaling, you might want to master assignments first prior to jumping into double closes.
But if you've got a solid deal, a reliable end buyer, and a title company that knows the drill, a double close can be a fantastic way to maximize your profits. It gives you control, privacy, and flexibility that other strategies just can't match. Just make sure you do your homework, run the numbers twice, and have a backup plan ready to go.
At the end of the day, real property investing is about finding creative ways to make deals work. The double close is one of those tools that, when used correctly, can open doors you didn't even know existed. So go ahead, give it a shot—and don't forget to bring your transactional lender along for the ride.
You might be wondering, "Why not just do an assignment of contract?" That's a fair question. An assignment is simpler—you just sign over your rights to buy the property to another buyer, and they pay you a fee. It's quick and involves less paperwork. But here's the catch: not all sellers allow assignments. Some purchase agreements explicitly prohibit them, and many title companies won't touch an assignment if the seller hasn't agreed to it in writing.
A double close gets around that issue You buy the property, and then you sell it. That original seller sees a clean, straightforward transaction on their end. The end buyer sees a clean transaction on their end. You're in the middle, and yes, you'll pay some extra closing costs and recording fees, but you also gain control and privacy. Your profit margin stays protected because the end buyer doesn't necessarily know what you paid for the property.
Let's be real for a second. If you're flipping houses as a business, the last thing you want is the end buyer knowing you're making $30,000 on the deal. They might try to cut you out and go directly to the original seller. A double close keeps your numbers under wraps. That alone makes it worth considering.
Another reason people use this strategy? Financing. If you're using a transactional lender—more on that in a minute—you can close on a property even if you don't have the full purchase price sitting in your bank account. The lender gives you a short-term loan to buy the property, and you pay it back the moment the second sale closes. It's like a bridge that gets you from point A to point B without drowning in the river.
Double closes are powerful, but they're also risky if you don't know what you're doing. Here are some mistakes I've seen people make—and you should definitely avoid them.
If you're trying to decide between a double close and an assignment, here's a quick comparison to help you out.
| Aspect | Double Close | Assignment of Contract |
|---|---|---|
| Privacy | Your profit is hidden from the end buyer | Your fee is often disclosed |
| Seller approval | Not usually required | May be required in the contract |
| Closing costs | Higher (two sets of fees) | Lower (one transaction) |
| Financing | Needs transactional funding | No funding needed |
| Risk | Higher (you own the property briefly) | Lower (you never take title) |
| Profit potential | Potentially higher | Potentially lower (but simpler) |
As you can see, there's no universal "right" answer. It depends on your situation, the real estate and the players involved. If the seller is fine with an assignment, that might be the easier route. But if you need privacy or the seller won't budge, a double close is your best bet.
Yes, a double close is completely legal in all 50 states. It's a standard real estate practice used by investors and wholesalers. That said you must make sure you're not violating any anti-flipping rules tied to your end buyer's financing, and you should always be transparent with your transactional lender about what you're doing.
You typically need enough to cover the down installment and closing costs on the first purchase, unless you're using a transactional lender. Transactional lenders usually require some skin in the game, but it's often less than a traditional down payment. Keep in mind, you'll also need to cover the closing costs on the second sale, although those are usually paid out of the proceeds.
Yes, if you have the cash to buy the real estate outright, you don't need a bank at all. It's possible to simply purchase the property, hold it for a day or two, and then sell it. Just be aware that you'll be tying up your own money, even if it's only for a short period. Some investors prefer this method because it avoids lender fees and gives them more control over the timing.
I've been around the block a few times, and I've learned a thing or two about making these deals go smoothly. Here are my best tips.
Let's paint a picture. You find a killer deal on a house—maybe a distressed property that needs some work, or a seller who just wants out fast. The problem? You don't have the cash to buy it outright, and you don't want to live in it anyway. Your plan is to flip it to another buyer for a profit. But here's the thing: the end buyer wants to purchase it from you, not from the original owner. So how do you make that happen without actually putting up a ton of your own money?
That's where a double close comes in. Honestly, it sounds more complicated than it is. Think of it like buying a ticket to a sold-out concert and then selling that same ticket to someone else five minutes later—but you never actually attend the show. You're just the middleman, and the paperwork happens twice in quick succession.
In real real estate a double close (sometimes called a simultaneous closing or double closing) is when a buyer purchases a property and then immediately resells it to another buyer, usually within days or even hours. The key is that both transactions close back-to-back, often at the same title company or closing agent's office. If you're a wholesaler or an investor flipping houses, this strategy can be a game-changer.